Correlation Between Nuveen Senior and Nuveen Credit
Can any of the company-specific risk be diversified away by investing in both Nuveen Senior and Nuveen Credit 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 Senior and Nuveen Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Senior Income and Nuveen Credit Strategies, you can compare the effects of market volatilities on Nuveen Senior and Nuveen Credit 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 Senior with a short position of Nuveen Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Senior and Nuveen Credit.
Diversification Opportunities for Nuveen Senior and Nuveen Credit
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nuveen and Nuveen is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Senior Income and Nuveen Credit Strategies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Credit Strategies and Nuveen Senior 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 Senior Income are associated (or correlated) with Nuveen Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Credit Strategies has no effect on the direction of Nuveen Senior i.e., Nuveen Senior and Nuveen Credit go up and down completely randomly.
Pair Corralation between Nuveen Senior and Nuveen Credit
Considering the 90-day investment horizon Nuveen Senior is expected to generate 4.88 times less return on investment than Nuveen Credit. But when comparing it to its historical volatility, Nuveen Senior Income is 1.02 times less risky than Nuveen Credit. It trades about 0.02 of its potential returns per unit of risk. Nuveen Credit Strategies is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 419.00 in Nuveen Credit Strategies on August 24, 2024 and sell it today you would earn a total of 158.00 from holding Nuveen Credit Strategies or generate 37.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 32.06% |
| Values | Daily Returns |
Nuveen Senior Income vs. Nuveen Credit Strategies
Performance |
| Timeline |
| Nuveen Senior Income |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Nuveen Credit Strategies |
Nuveen Senior and Nuveen Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Senior and Nuveen Credit
The main advantage of trading using opposite Nuveen Senior and Nuveen Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Senior position performs unexpectedly, Nuveen Credit 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 Credit will offset losses from the drop in Nuveen Credit's long position.| Nuveen Senior vs. Nuveen Floating Rate | Nuveen Senior vs. Pioneer Floating Rate | Nuveen Senior vs. BlackRock Floating Rate | Nuveen Senior vs. Blackrock Floating Rate |
| Nuveen Credit vs. MFS Investment Grade | Nuveen Credit vs. Eaton Vance National | Nuveen Credit vs. Blackrock Muniyield Quality | Nuveen Credit vs. Munivest Fund |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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