Correlation Between BNY Mellon and Nuveen Floating

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

By analyzing existing cross correlation between BNY Mellon High and Nuveen Floating Rate, you can compare the effects of market volatilities on BNY Mellon and Nuveen Floating 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 BNY Mellon with a short position of Nuveen Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of BNY Mellon and Nuveen Floating.

Diversification Opportunities for BNY Mellon and Nuveen Floating

-0.3

Correlation Coefficient

BNY Mellon  Nuveen Floating

Very good diversification

The 3 months correlation between BNY and Nuveen is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding BNY Mellon High and Nuveen Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Floating Rate and BNY Mellon 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 BNY Mellon High are associated (or correlated) with Nuveen Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Floating Rate has no effect on the direction of BNY Mellon i.e., BNY Mellon and Nuveen Floating go up and down completely randomly.

Pair Corralation between BNY Mellon and Nuveen Floating

Considering the 90-day investment horizon BNY Mellon High is expected to generate 0.93 times more return on investment than Nuveen Floating. However, BNY Mellon High is 1.08 times less risky than Nuveen Floating. It trades about 0.01 of its potential returns per unit of risk. Nuveen Floating Rate is currently generating about -0.09 per unit of risk. If you would invest  255.00  in BNY Mellon High on December 26, 2024 and sell it today you would earn a total of  1.00  from holding BNY Mellon High or generate 0.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

BNY Mellon High  vs.  Nuveen Floating Rate

BNY Mellon High

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in BNY Mellon High are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical indicators, BNY Mellon is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Nuveen Floating Rate

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nuveen Floating Rate has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively invariable technical and fundamental indicators, Nuveen Floating is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with BNY Mellon and Nuveen Floating

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

The idea behind BNY Mellon High and Nuveen Floating Rate 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.

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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.