Correlation Between Commodities Strategy and Nuveen Preferred
Can any of the company-specific risk be diversified away by investing in both Commodities Strategy 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 Commodities Strategy and Nuveen Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commodities Strategy Fund and Nuveen Preferred Securities, you can compare the effects of market volatilities on Commodities Strategy 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 Commodities Strategy with a short position of Nuveen Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commodities Strategy and Nuveen Preferred.
Diversification Opportunities for Commodities Strategy and Nuveen Preferred
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Commodities and Nuveen is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Commodities Strategy Fund 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 Commodities Strategy 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 Commodities Strategy Fund 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 Commodities Strategy i.e., Commodities Strategy and Nuveen Preferred go up and down completely randomly.
Pair Corralation between Commodities Strategy and Nuveen Preferred
Assuming the 90 days horizon Commodities Strategy Fund is expected to generate 6.61 times more return on investment than Nuveen Preferred. However, Commodities Strategy is 6.61 times more volatile than Nuveen Preferred Securities. It trades about 0.07 of its potential returns per unit of risk. Nuveen Preferred Securities is currently generating about 0.04 per unit of risk. If you would invest 2,881 in Commodities Strategy Fund on August 30, 2024 and sell it today you would earn a total of 42.00 from holding Commodities Strategy Fund or generate 1.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Commodities Strategy Fund vs. Nuveen Preferred Securities
Performance |
| Timeline |
| Commodities Strategy |
| Nuveen Preferred Sec |
Commodities Strategy and Nuveen Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commodities Strategy and Nuveen Preferred
The main advantage of trading using opposite Commodities Strategy and Nuveen Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commodities Strategy 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.| Commodities Strategy vs. Basic Materials Fund | Commodities Strategy vs. Energy Services Fund | Commodities Strategy vs. Energy Fund Investor | Commodities Strategy vs. Precious Metals Fund |
| Nuveen Preferred vs. T Rowe Price | Nuveen Preferred vs. Commodities Strategy Fund | Nuveen Preferred vs. Dodge Cox Emerging | Nuveen Preferred vs. Rbc Emerging Markets |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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