Correlation Between Flow Capital and Nuveen Senior

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

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

Diversification Opportunities for Flow Capital and Nuveen Senior

0.02

Correlation Coefficient

Flow Capital  Nuveen Senior

Significant diversification

The 3 months correlation between Flow and Nuveen is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Flow Capital Corp and Nuveen Senior Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Senior Income and Flow Capital 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 Flow Capital Corp are associated (or correlated) with Nuveen Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Senior Income has no effect on the direction of Flow Capital i.e., Flow Capital and Nuveen Senior go up and down completely randomly.

Pair Corralation between Flow Capital and Nuveen Senior

If you would invest  51.00  in Flow Capital Corp on September 4, 2024 and sell it today you would earn a total of  9.00  from holding Flow Capital Corp or generate 17.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Flow Capital Corp  vs.  Nuveen Senior Income

Flow Capital Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Flow Capital Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly unfluctuating fundamental indicators, Flow Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Nuveen Senior Income

Risk-Adjusted Performance

0 of 100

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.

Pair Trading with Flow Capital and Nuveen Senior

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

The idea behind Flow Capital Corp and Nuveen Senior Income 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.