Correlation Between Nuveen Senior and BlackRock Capital

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

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

Diversification Opportunities for Nuveen Senior and BlackRock Capital

0.0

Correlation Coefficient

Nuveen Senior  BlackRock Capital

Pay attention - limited upside

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

Pair Corralation between Nuveen Senior and BlackRock Capital

If you would invest (100.00) in Nuveen Senior Income on December 26, 2024 and sell it today you would earn a total of  100.00  from holding Nuveen Senior Income or generate -100.0% return on investment over 90 days.

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

Nuveen Senior Income  vs.  BlackRock Capital Allocation

Nuveen Senior Income

Risk-Adjusted Performance

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 latest stock price mess, may contribute to short-term losses for the institutional investors.

BlackRock Capital

Risk-Adjusted Performance

Very Weak

Over the last 90 days BlackRock Capital Allocation has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, BlackRock Capital 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 Senior and BlackRock Capital

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

The idea behind Nuveen Senior Income and BlackRock Capital Allocation 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.