Correlation Between Nuveen Credit and Allspring Income

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

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

Diversification Opportunities for Nuveen Credit and Allspring Income

0.94

Correlation Coefficient

Nuveen Credit  Allspring Income

Almost no diversification

The 3 months correlation between Nuveen and Allspring is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Credit Strategies and Allspring Income Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allspring Income Opp and Nuveen Credit 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 Credit Strategies are associated (or correlated) with Allspring Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allspring Income Opp has no effect on the direction of Nuveen Credit i.e., Nuveen Credit and Allspring Income go up and down completely randomly.

Pair Corralation between Nuveen Credit and Allspring Income

Considering the 90-day investment horizon Nuveen Credit Strategies is expected to under-perform the Allspring Income. In addition to that, Nuveen Credit is 1.05 times more volatile than Allspring Income Opportunities. It trades about -0.06 of its total potential returns per unit of risk. Allspring Income Opportunities is currently generating about -0.04 per unit of volatility. If you would invest  688.00  in Allspring Income Opportunities on January 25, 2025 and sell it today you would lose (25.00) from holding Allspring Income Opportunities or give up 3.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Nuveen Credit Strategies  vs.  Allspring Income Opportunities

Nuveen Credit Strategies

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nuveen Credit Strategies has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound basic indicators, Nuveen Credit is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Allspring Income Opp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allspring Income Opportunities has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound basic indicators, Allspring Income is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Nuveen Credit and Allspring Income

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

The idea behind Nuveen Credit Strategies and Allspring Income Opportunities 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.