Correlation Between Nuveen Preferred and Nuveen Kansas
Can any of the company-specific risk be diversified away by investing in both Nuveen Preferred and Nuveen Kansas 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 Kansas 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 Kansas Municipal, you can compare the effects of market volatilities on Nuveen Preferred and Nuveen Kansas 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 Kansas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Preferred and Nuveen Kansas.
Diversification Opportunities for Nuveen Preferred and Nuveen Kansas
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nuveen and Nuveen is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Preferred Securities and Nuveen Kansas Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Kansas Municipal 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 Kansas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Kansas Municipal has no effect on the direction of Nuveen Preferred i.e., Nuveen Preferred and Nuveen Kansas go up and down completely randomly.
Pair Corralation between Nuveen Preferred and Nuveen Kansas
Assuming the 90 days horizon Nuveen Preferred is expected to generate 4.18 times less return on investment than Nuveen Kansas. But when comparing it to its historical volatility, Nuveen Preferred Securities is 1.69 times less risky than Nuveen Kansas. It trades about 0.09 of its potential returns per unit of risk. Nuveen Kansas Municipal is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 990.00 in Nuveen Kansas Municipal on August 30, 2024 and sell it today you would earn a total of 14.00 from holding Nuveen Kansas Municipal or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Nuveen Preferred Securities vs. Nuveen Kansas Municipal
Performance |
| Timeline |
| Nuveen Preferred Sec |
| Nuveen Kansas Municipal |
Nuveen Preferred and Nuveen Kansas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Preferred and Nuveen Kansas
The main advantage of trading using opposite Nuveen Preferred and Nuveen Kansas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Preferred position performs unexpectedly, Nuveen Kansas 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 Kansas will offset losses from the drop in Nuveen Kansas' 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 Kansas vs. American Funds Conservative | Nuveen Kansas vs. Western Asset Diversified | Nuveen Kansas vs. Jhancock Diversified Macro | Nuveen Kansas vs. Conservative Balanced Allocation |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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