Correlation Between Nuveen Preferred and Nuveen Santa
Can any of the company-specific risk be diversified away by investing in both Nuveen Preferred and Nuveen Santa at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Nuveen Preferred and Nuveen Santa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Preferred Securities and Nuveen Santa Barbara, you can compare the effects of market volatilities on Nuveen Preferred and Nuveen Santa and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Nuveen Preferred with a short position of Nuveen Santa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Preferred and Nuveen Santa.
Diversification Opportunities for Nuveen Preferred and Nuveen Santa
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nuveen and Nuveen is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Preferred Securities and Nuveen Santa Barbara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Santa Barbara and Nuveen Preferred is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Nuveen Preferred Securities are associated (or correlated) with Nuveen Santa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Santa Barbara has no effect on the direction of Nuveen Preferred i.e., Nuveen Preferred and Nuveen Santa go up and down completely randomly.
Pair Corralation between Nuveen Preferred and Nuveen Santa
Assuming the 90 days horizon Nuveen Preferred is expected to generate 7.18 times less return on investment than Nuveen Santa. But when comparing it to its historical volatility, Nuveen Preferred Securities is 2.74 times less risky than Nuveen Santa. It trades about 0.13 of its potential returns per unit of risk. Nuveen Santa Barbara is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 6,440 in Nuveen Santa Barbara on September 1, 2024 and sell it today you would earn a total of 272.00 from holding Nuveen Santa Barbara or generate 4.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Preferred Securities vs. Nuveen Santa Barbara
Performance |
| Timeline |
| Nuveen Preferred Sec |
| Nuveen Santa Barbara |
Nuveen Preferred and Nuveen Santa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Preferred and Nuveen Santa
The main advantage of trading using opposite Nuveen Preferred and Nuveen Santa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Preferred position performs unexpectedly, Nuveen Santa can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Nuveen Santa will offset losses from the drop in Nuveen Santa's long position.| Nuveen Preferred vs. Nuveen Small Cap | Nuveen Preferred vs. Nuveen Real Estate | Nuveen Preferred vs. Nuveen Real Estate | Nuveen Preferred vs. Nuveen Preferred Securities |
| Nuveen Santa vs. Nuveen Small Cap | Nuveen Santa vs. Nuveen Real Estate | Nuveen Santa vs. Nuveen Real Estate | Nuveen Santa vs. Nuveen Preferred Securities |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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