Correlation Between Nuveen Senior and Princeton Capital

Can any of the company-specific risk be diversified away by investing in both Nuveen Senior and Princeton 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 Princeton 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 Princeton Capital, you can compare the effects of market volatilities on Nuveen Senior and Princeton 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 Princeton Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Senior and Princeton Capital.

Diversification Opportunities for Nuveen Senior and Princeton Capital

0.11

Correlation Coefficient

Nuveen Senior  Princeton Capital

Average diversification

The 3 months correlation between Nuveen and Princeton is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Senior Income and Princeton Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Princeton 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 Princeton Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Princeton Capital has no effect on the direction of Nuveen Senior i.e., Nuveen Senior and Princeton Capital go up and down completely randomly.

Pair Corralation between Nuveen Senior and Princeton Capital

If you would invest  456.00  in Nuveen Senior Income on September 4, 2024 and sell it today you would earn a total of  0.00  from holding Nuveen Senior Income or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Nuveen Senior Income  vs.  Princeton Capital

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.

Princeton Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Princeton Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Nuveen Senior and Princeton Capital

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

The idea behind Nuveen Senior Income and Princeton Capital 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.