Correlation Between Nuveen Floating and Sprott Physical

Can any of the company-specific risk be diversified away by investing in both Nuveen Floating and Sprott Physical 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 Sprott Physical 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 Sprott Physical Gold, you can compare the effects of market volatilities on Nuveen Floating and Sprott Physical 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 Sprott Physical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Floating and Sprott Physical.

Diversification Opportunities for Nuveen Floating and Sprott Physical

-0.51

Correlation Coefficient

Nuveen Floating  Sprott Physical

Excellent diversification

The 3 months correlation between Nuveen and Sprott is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Floating Rate and Sprott Physical Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprott Physical Gold 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 Sprott Physical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprott Physical Gold has no effect on the direction of Nuveen Floating i.e., Nuveen Floating and Sprott Physical go up and down completely randomly.

Pair Corralation between Nuveen Floating and Sprott Physical

Considering the 90-day investment horizon Nuveen Floating is expected to generate 1.21 times less return on investment than Sprott Physical. But when comparing it to its historical volatility, Nuveen Floating Rate is 1.24 times less risky than Sprott Physical. It trades about 0.08 of its potential returns per unit of risk. Sprott Physical Gold is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,502  in Sprott Physical Gold on October 15, 2024 and sell it today you would earn a total of  571.00  from holding Sprott Physical Gold or generate 38.02% return on investment over 90 days.

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

Nuveen Floating Rate  vs.  Sprott Physical Gold

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.

Sprott Physical Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sprott Physical Gold has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Sprott Physical is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Nuveen Floating and Sprott Physical

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

The idea behind Nuveen Floating Rate and Sprott Physical Gold 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..