Correlation Between Nuveen Preferred and Jpmorgan Mortgage
Can any of the company-specific risk be diversified away by investing in both Nuveen Preferred and Jpmorgan Mortgage 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 Jpmorgan Mortgage 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 Jpmorgan Mortgage Backed Securities, you can compare the effects of market volatilities on Nuveen Preferred and Jpmorgan Mortgage 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 Jpmorgan Mortgage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Preferred and Jpmorgan Mortgage.
Diversification Opportunities for Nuveen Preferred and Jpmorgan Mortgage
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nuveen and Jpmorgan is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Preferred Securities and Jpmorgan Mortgage Backed Secur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Mortgage 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 Jpmorgan Mortgage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Mortgage has no effect on the direction of Nuveen Preferred i.e., Nuveen Preferred and Jpmorgan Mortgage go up and down completely randomly.
Pair Corralation between Nuveen Preferred and Jpmorgan Mortgage
Assuming the 90 days horizon Nuveen Preferred Securities is expected to generate 0.65 times more return on investment than Jpmorgan Mortgage. However, Nuveen Preferred Securities is 1.54 times less risky than Jpmorgan Mortgage. It trades about 0.39 of its potential returns per unit of risk. Jpmorgan Mortgage Backed Securities is currently generating about 0.25 per unit of risk. If you would invest 1,543 in Nuveen Preferred Securities on November 9, 2024 and sell it today you would earn a total of 25.00 from holding Nuveen Preferred Securities or generate 1.62% 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. Jpmorgan Mortgage Backed Secur
Performance |
| Timeline |
| Nuveen Preferred Sec |
| Jpmorgan Mortgage |
Nuveen Preferred and Jpmorgan Mortgage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Preferred and Jpmorgan Mortgage
The main advantage of trading using opposite Nuveen Preferred and Jpmorgan Mortgage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Preferred position performs unexpectedly, Jpmorgan Mortgage 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 Jpmorgan Mortgage will offset losses from the drop in Jpmorgan Mortgage's long position.| Nuveen Preferred vs. Pimco Mortgage Opportunities | Nuveen Preferred vs. Cohen Steers Preferred | Nuveen Preferred vs. Jpmorgan Mortgage Backed Securities | Nuveen Preferred vs. Muzinich Low Duration |
| Jpmorgan Mortgage vs. American Funds Retirement | Jpmorgan Mortgage vs. Putnman Retirement Ready | Jpmorgan Mortgage vs. Franklin Lifesmart Retirement | Jpmorgan Mortgage vs. College Retirement Equities |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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