Correlation Between Western Asset and Nuveen Preferred
Can any of the company-specific risk be diversified away by investing in both Western Asset 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 Western Asset and Nuveen Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Premier and Nuveen Preferred And, you can compare the effects of market volatilities on Western Asset 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 Western Asset with a short position of Nuveen Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Nuveen Preferred.
Diversification Opportunities for Western Asset and Nuveen Preferred
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and Nuveen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Premier and Nuveen Preferred And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Preferred And and Western Asset 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 Western Asset Premier 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 And has no effect on the direction of Western Asset i.e., Western Asset and Nuveen Preferred go up and down completely randomly.
Pair Corralation between Western Asset and Nuveen Preferred
If you would invest 92.00 in Western Asset Premier on November 19, 2024 and sell it today you would earn a total of 8.00 from holding Western Asset Premier or generate 8.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Western Asset Premier vs. Nuveen Preferred And
Performance |
| Timeline |
| Western Asset Premier |
| Nuveen Preferred And |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Western Asset and Nuveen Preferred Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Nuveen Preferred
The main advantage of trading using opposite Western Asset and Nuveen Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset 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.| Western Asset vs. Siit Ultra Short | Western Asset vs. Barings Active Short | Western Asset vs. Alpine Ultra Short | Western Asset vs. Blackrock Global Longshort |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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