Correlation Between Nuveen Preferred and Aberdeen Income

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

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

Diversification Opportunities for Nuveen Preferred and Aberdeen Income

0.0

Correlation Coefficient

Nuveen Preferred  Aberdeen Income

Pay attention - limited upside

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

Pair Corralation between Nuveen Preferred and Aberdeen Income

If you would invest  572.00  in Aberdeen Income Credit on December 20, 2024 and sell it today you would earn a total of  25.00  from holding Aberdeen Income Credit or generate 4.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Nuveen Preferred Securites  vs.  Aberdeen Income Credit

Nuveen Preferred Sec

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nuveen Preferred Securites has generated negative risk-adjusted returns adding no value to fund investors. In spite of comparatively stable basic indicators, Nuveen Preferred is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Aberdeen Income Credit

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Income Credit are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively invariable fundamental indicators, Aberdeen Income 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 Nuveen Preferred and Aberdeen Income

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

The idea behind Nuveen Preferred Securites and Aberdeen Income Credit 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.