Correlation Between Sierra Strategic and Nuveen High
Can any of the company-specific risk be diversified away by investing in both Sierra Strategic 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 Sierra Strategic and Nuveen High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sierra Strategic Income and Nuveen High Yield, you can compare the effects of market volatilities on Sierra Strategic 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 Sierra Strategic with a short position of Nuveen High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sierra Strategic and Nuveen High.
Diversification Opportunities for Sierra Strategic and Nuveen High
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sierra and Nuveen is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Sierra Strategic Income 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 Sierra Strategic 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 Sierra Strategic Income 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 Sierra Strategic i.e., Sierra Strategic and Nuveen High go up and down completely randomly.
Pair Corralation between Sierra Strategic and Nuveen High
Assuming the 90 days horizon Sierra Strategic Income is expected to under-perform the Nuveen High. But the mutual fund apears to be less risky and, when comparing its historical volatility, Sierra Strategic Income is 2.4 times less risky than Nuveen High. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Nuveen High Yield is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,504 in Nuveen High Yield on August 30, 2024 and sell it today you would earn a total of 5.00 from holding Nuveen High Yield or generate 0.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sierra Strategic Income vs. Nuveen High Yield
Performance |
| Timeline |
| Sierra Strategic Income |
| Nuveen High Yield |
Sierra Strategic and Nuveen High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sierra Strategic and Nuveen High
The main advantage of trading using opposite Sierra Strategic and Nuveen High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sierra Strategic 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.| Sierra Strategic vs. HUMANA INC | Sierra Strategic vs. Aquagold International | Sierra Strategic vs. Barloworld Ltd ADR | Sierra Strategic vs. Morningstar Unconstrained Allocation |
| Nuveen High vs. Oppenheimer Roc High | Nuveen High vs. Nuveen All American Municipal | Nuveen High vs. Nuveen Short Duration High | Nuveen High vs. Nuveen High Yield |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. |