Correlation Between Aqr Sustainable and Nuveen Preferred
Can any of the company-specific risk be diversified away by investing in both Aqr Sustainable and Nuveen Preferred 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 Aqr Sustainable and Nuveen Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aqr Sustainable Long Short and Nuveen Preferred Securities, you can compare the effects of market volatilities on Aqr Sustainable and Nuveen Preferred 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 Aqr Sustainable with a short position of Nuveen Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aqr Sustainable and Nuveen Preferred.
Diversification Opportunities for Aqr Sustainable and Nuveen Preferred
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aqr and Nuveen is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Aqr Sustainable Long Short and Nuveen Preferred Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Preferred Sec and Aqr Sustainable 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 Aqr Sustainable Long Short are associated (or correlated) with Nuveen Preferred. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Preferred Sec has no effect on the direction of Aqr Sustainable i.e., Aqr Sustainable and Nuveen Preferred go up and down completely randomly.
Pair Corralation between Aqr Sustainable and Nuveen Preferred
Assuming the 90 days horizon Aqr Sustainable Long Short is expected to generate 4.62 times more return on investment than Nuveen Preferred. However, Aqr Sustainable is 4.62 times more volatile than Nuveen Preferred Securities. It trades about 0.09 of its potential returns per unit of risk. Nuveen Preferred Securities is currently generating about 0.24 per unit of risk. If you would invest 1,386 in Aqr Sustainable Long Short on September 3, 2024 and sell it today you would earn a total of 117.00 from holding Aqr Sustainable Long Short or generate 8.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aqr Sustainable Long Short vs. Nuveen Preferred Securities
Performance |
| Timeline |
| Aqr Sustainable Long |
| Nuveen Preferred Sec |
Aqr Sustainable and Nuveen Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aqr Sustainable and Nuveen Preferred
The main advantage of trading using opposite Aqr Sustainable and Nuveen Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aqr Sustainable position performs unexpectedly, Nuveen Preferred 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 Preferred will offset losses from the drop in Nuveen Preferred's long position.| Aqr Sustainable vs. Franklin Natural Resources | Aqr Sustainable vs. Oil Gas Ultrasector | Aqr Sustainable vs. Firsthand Alternative Energy | Aqr Sustainable vs. Icon Natural Resources |
| Nuveen Preferred vs. Small Cap Stock | Nuveen Preferred vs. Growth Strategy Fund | Nuveen Preferred vs. Vanguard Windsor Fund | Nuveen Preferred vs. Ab Small Cap |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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