Correlation Between Performance Trust and Nuveen High
Can any of the company-specific risk be diversified away by investing in both Performance Trust 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 Performance Trust and Nuveen High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Performance Trust Municipal and Nuveen High Yield, you can compare the effects of market volatilities on Performance Trust 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 Performance Trust with a short position of Nuveen High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Performance Trust and Nuveen High.
Diversification Opportunities for Performance Trust and Nuveen High
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Performance and Nuveen is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Performance Trust Municipal 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 Performance Trust 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 Performance Trust Municipal 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 Performance Trust i.e., Performance Trust and Nuveen High go up and down completely randomly.
Pair Corralation between Performance Trust and Nuveen High
Assuming the 90 days horizon Performance Trust Municipal is expected to generate 0.8 times more return on investment than Nuveen High. However, Performance Trust Municipal is 1.25 times less risky than Nuveen High. It trades about 0.12 of its potential returns per unit of risk. Nuveen High Yield is currently generating about 0.09 per unit of risk. If you would invest 2,225 in Performance Trust Municipal on September 1, 2024 and sell it today you would earn a total of 97.00 from holding Performance Trust Municipal or generate 4.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Performance Trust Municipal vs. Nuveen High Yield
Performance |
| Timeline |
| Performance Trust |
| Nuveen High Yield |
Performance Trust and Nuveen High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Performance Trust and Nuveen High
The main advantage of trading using opposite Performance Trust and Nuveen High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Performance Trust 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.| Performance Trust vs. Performance Trust Strategic | Performance Trust vs. Performance Trust Municipal | Performance Trust vs. Sierra Strategic Income | Performance Trust vs. Nuveen High Yield |
| Nuveen High vs. Nuveen High Yield | Nuveen High vs. Nuveen High Yield | Nuveen High vs. Nuveen High Yield | Nuveen High vs. Western Asset Managed |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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