Correlation Between SPDR ICE and Nuveen Preferred
Can any of the company-specific risk be diversified away by investing in both SPDR ICE 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 SPDR ICE and Nuveen Preferred into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR ICE Preferred and Nuveen Preferred and, you can compare the effects of market volatilities on SPDR ICE 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 SPDR ICE with a short position of Nuveen Preferred. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR ICE and Nuveen Preferred.
Diversification Opportunities for SPDR ICE and Nuveen Preferred
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SPDR and Nuveen is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding SPDR ICE Preferred and Nuveen Preferred and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Preferred and SPDR ICE 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 SPDR ICE Preferred 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 SPDR ICE i.e., SPDR ICE and Nuveen Preferred go up and down completely randomly.
Pair Corralation between SPDR ICE and Nuveen Preferred
Considering the 90-day investment horizon SPDR ICE is expected to generate 1.4 times less return on investment than Nuveen Preferred. In addition to that, SPDR ICE is 4.19 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 0.11 per unit of volatility. If you would invest 2,541 in Nuveen Preferred and on December 18, 2024 and sell it today you would earn a total of 28.00 from holding Nuveen Preferred and or generate 1.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.33% |
Values | Daily Returns |
SPDR ICE Preferred vs. Nuveen Preferred and
Performance |
Timeline |
SPDR ICE Preferred |
Nuveen Preferred |
SPDR ICE and Nuveen Preferred Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SPDR ICE and Nuveen Preferred
The main advantage of trading using opposite SPDR ICE and Nuveen Preferred positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR ICE 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.SPDR ICE vs. VanEck Preferred Securities | SPDR ICE vs. Invesco Preferred ETF | SPDR ICE vs. Invesco Financial Preferred | SPDR ICE vs. Global X SuperIncome |
Nuveen Preferred vs. Strategy Shares | Nuveen Preferred vs. Freedom Day Dividend | Nuveen Preferred vs. iShares MSCI China | Nuveen Preferred vs. Tidal Trust II |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Content Syndication Quickly integrate customizable finance content to your own investment portal |