Correlation Between Abrdn Emerging and Nuveen Senior

Can any of the company-specific risk be diversified away by investing in both Abrdn Emerging and Nuveen Senior 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 Abrdn Emerging and Nuveen Senior into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Abrdn Emerging Markets and Nuveen Senior Income, you can compare the effects of market volatilities on Abrdn Emerging and Nuveen Senior 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 Abrdn Emerging with a short position of Nuveen Senior. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abrdn Emerging and Nuveen Senior.

Diversification Opportunities for Abrdn Emerging and Nuveen Senior

0.0

Correlation Coefficient

Abrdn Emerging  Nuveen Senior

Pay attention - limited upside

The 3 months correlation between Abrdn and Nuveen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Abrdn Emerging Markets and Nuveen Senior Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Senior Income and Abrdn Emerging 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 Abrdn Emerging Markets are associated (or correlated) with Nuveen Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Senior Income has no effect on the direction of Abrdn Emerging i.e., Abrdn Emerging and Nuveen Senior go up and down completely randomly.

Pair Corralation between Abrdn Emerging and Nuveen Senior

Considering the 90-day investment horizon Abrdn Emerging Markets is expected to generate 1.79 times more return on investment than Nuveen Senior. However, Abrdn Emerging is 1.79 times more volatile than Nuveen Senior Income. It trades about 0.04 of its potential returns per unit of risk. Nuveen Senior Income is currently generating about 0.06 per unit of risk. If you would invest  447.00  in Abrdn Emerging Markets on September 14, 2024 and sell it today you would earn a total of  100.00  from holding Abrdn Emerging Markets or generate 22.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	29.09%
Values	Daily Returns

Abrdn Emerging Markets  vs.  Nuveen Senior Income

Abrdn Emerging Markets

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Abrdn Emerging Markets are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, Abrdn Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Nuveen Senior Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen Senior Income has generated negative risk-adjusted returns adding no value to fund investors. Despite quite persistent basic indicators, Nuveen Senior is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Abrdn Emerging and Nuveen Senior

The main advantage of trading using opposite Abrdn Emerging and Nuveen Senior positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abrdn Emerging position performs unexpectedly, Nuveen Senior 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 Senior will offset losses from the drop in Nuveen Senior's long position.

The idea behind Abrdn Emerging Markets and Nuveen Senior Income pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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.