Correlation Between Apple and Nuveen Municipal
Can any of the company-specific risk be diversified away by investing in both Apple and Nuveen Municipal 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 Apple and Nuveen Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Nuveen Municipal High, you can compare the effects of market volatilities on Apple and Nuveen Municipal 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 Apple with a short position of Nuveen Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Nuveen Municipal.
Diversification Opportunities for Apple and Nuveen Municipal
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Apple and Nuveen is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Nuveen Municipal High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Municipal High and Apple 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 Apple Inc are associated (or correlated) with Nuveen Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Municipal High has no effect on the direction of Apple i.e., Apple and Nuveen Municipal go up and down completely randomly.
Pair Corralation between Apple and Nuveen Municipal
Given the investment horizon of 90 days Apple Inc is expected to under-perform the Nuveen Municipal. In addition to that, Apple is 2.18 times more volatile than Nuveen Municipal High. It trades about -0.38 of its total potential returns per unit of risk. Nuveen Municipal High is currently generating about 0.17 per unit of volatility. If you would invest 1,075 in Nuveen Municipal High on October 22, 2024 and sell it today you would earn a total of 21.00 from holding Nuveen Municipal High or generate 1.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Apple Inc vs. Nuveen Municipal High
Performance |
| Timeline |
| Apple Inc |
| Nuveen Municipal High |
Apple and Nuveen Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Nuveen Municipal
The main advantage of trading using opposite Apple and Nuveen Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, Nuveen Municipal 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 Municipal will offset losses from the drop in Nuveen Municipal's long position.The idea behind Apple Inc and Nuveen Municipal High 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.| Nuveen Municipal vs. Dreyfusstandish Global Fixed | Nuveen Municipal vs. Pnc Balanced Allocation | Nuveen Municipal vs. Rbb Fund | Nuveen Municipal vs. Tax Managed Large Cap |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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