Correlation Between Nuveen Preferred and Nuveen High
Can any of the company-specific risk be diversified away by investing in both Nuveen Preferred and Nuveen High 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 High 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 High Yield, you can compare the effects of market volatilities on Nuveen Preferred and Nuveen High 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 High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Preferred and Nuveen High.
Diversification Opportunities for Nuveen Preferred and Nuveen High
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nuveen and Nuveen is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Preferred Securities and Nuveen High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen High Yield 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 High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen High Yield has no effect on the direction of Nuveen Preferred i.e., Nuveen Preferred and Nuveen High go up and down completely randomly.
Pair Corralation between Nuveen Preferred and Nuveen High
Assuming the 90 days horizon Nuveen Preferred is expected to generate 7.28 times less return on investment than Nuveen High. But when comparing it to its historical volatility, Nuveen Preferred Securities is 2.82 times less risky than Nuveen High. It trades about 0.07 of its potential returns per unit of risk. Nuveen High Yield is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,476 in Nuveen High Yield on August 28, 2024 and sell it today you would earn a total of 29.00 from holding Nuveen High Yield or generate 1.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Nuveen Preferred Securities vs. Nuveen High Yield
Performance |
| Timeline |
| Nuveen Preferred Sec |
| Nuveen High Yield |
Nuveen Preferred and Nuveen High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Preferred and Nuveen High
The main advantage of trading using opposite Nuveen Preferred and Nuveen High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Preferred position performs unexpectedly, Nuveen High 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 High will offset losses from the drop in Nuveen High's long position.| Nuveen Preferred vs. Transamerica Financial Life | Nuveen Preferred vs. John Hancock Financial | Nuveen Preferred vs. Fidelity Advisor Financial | Nuveen Preferred vs. 1919 Financial Services |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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