Correlation Between Invesco Preferred and Nuveen Preferred

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

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

Diversification Opportunities for Invesco Preferred and Nuveen Preferred

-0.3

Correlation Coefficient

Invesco Preferred  Nuveen Preferred

Very good diversification

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

Pair Corralation between Invesco Preferred and Nuveen Preferred

Considering the 90-day investment horizon Invesco Preferred is expected to generate 2.12 times less return on investment than Nuveen Preferred. In addition to that, Invesco Preferred is 4.98 times more volatile than Nuveen Preferred and. It trades about 0.02 of its total potential returns per unit of risk. Nuveen Preferred and is currently generating about 0.18 per unit of volatility. If you would invest  2,407  in Nuveen Preferred and on October 11, 2024 and sell it today you would earn a total of  146.00  from holding Nuveen Preferred and or generate 6.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	43.15%
Values	Daily Returns

Invesco Preferred ETF  vs.  Nuveen Preferred and

Invesco Preferred ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Preferred ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Invesco Preferred is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nuveen Preferred

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen Preferred and has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Nuveen Preferred is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Invesco Preferred and Nuveen Preferred

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

The idea behind Invesco Preferred ETF and Nuveen Preferred 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 Commodity Directory module to find actively traded commodities issued by global exchanges.