Correlation Between Nuveen Floating and BlackRock Energy

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

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

Diversification Opportunities for Nuveen Floating and BlackRock Energy

0.37

Correlation Coefficient

Nuveen Floating  BlackRock Energy

Weak diversification

The 3 months correlation between Nuveen and BlackRock is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Floating Rate and BlackRock Energy and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BlackRock Energy and Nuveen Floating 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 Nuveen Floating Rate are associated (or correlated) with BlackRock Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BlackRock Energy has no effect on the direction of Nuveen Floating i.e., Nuveen Floating and BlackRock Energy go up and down completely randomly.

Pair Corralation between Nuveen Floating and BlackRock Energy

Considering the 90-day investment horizon Nuveen Floating Rate is expected to generate 0.66 times more return on investment than BlackRock Energy. However, Nuveen Floating Rate is 1.52 times less risky than BlackRock Energy. It trades about 0.08 of its potential returns per unit of risk. BlackRock Energy and is currently generating about 0.03 per unit of risk. If you would invest  675.00  in Nuveen Floating Rate on October 15, 2024 and sell it today you would earn a total of  209.00  from holding Nuveen Floating Rate or generate 30.96% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Nuveen Floating Rate  vs.  BlackRock Energy and

Nuveen Floating Rate

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Floating Rate are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. 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.

BlackRock Energy

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in BlackRock Energy and are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, BlackRock Energy is not utilizing all of its potentials. The new stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Nuveen Floating and BlackRock Energy

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

The idea behind Nuveen Floating Rate and BlackRock Energy and 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.