Correlation Between Intermediate-term and Nuveen Preferred
Can any of the company-specific risk be diversified away by investing in both Intermediate-term 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 Intermediate-term and Nuveen Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intermediate Term Tax Free Bond and Nuveen Preferred Securities, you can compare the effects of market volatilities on Intermediate-term 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 Intermediate-term with a short position of Nuveen Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intermediate-term and Nuveen Preferred.
Diversification Opportunities for Intermediate-term and Nuveen Preferred
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Intermediate-term and Nuveen is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Intermediate Term Tax Free Bon 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 Intermediate-term 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 Intermediate Term Tax Free Bond 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 Intermediate-term i.e., Intermediate-term and Nuveen Preferred go up and down completely randomly.
Pair Corralation between Intermediate-term and Nuveen Preferred
Assuming the 90 days horizon Intermediate-term is expected to generate 2.52 times less return on investment than Nuveen Preferred. But when comparing it to its historical volatility, Intermediate Term Tax Free Bond is 1.15 times less risky than Nuveen Preferred. It trades about 0.05 of its potential returns per unit of risk. Nuveen Preferred Securities is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,554 in Nuveen Preferred Securities on November 3, 2024 and sell it today you would earn a total of 7.00 from holding Nuveen Preferred Securities or generate 0.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Intermediate Term Tax Free Bon vs. Nuveen Preferred Securities
Performance |
| Timeline |
| Intermediate Term Tax |
| Nuveen Preferred Sec |
Intermediate-term and Nuveen Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intermediate-term and Nuveen Preferred
The main advantage of trading using opposite Intermediate-term and Nuveen Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intermediate-term 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.| Intermediate-term vs. Texton Property | Intermediate-term vs. Neuberger Berman Real | Intermediate-term vs. Short Real Estate | Intermediate-term vs. Prudential Real Estate |
| Nuveen Preferred vs. Nuveen Minnesota Municipal | Nuveen Preferred vs. Nuveen Symphony Floating | Nuveen Preferred vs. Nuveen Symphony Floating | Nuveen Preferred vs. Nuveen Symphony Floating |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges |