Correlation Between Alliancebernstein and Nuveen Minnesota
Can any of the company-specific risk be diversified away by investing in both Alliancebernstein and Nuveen Minnesota 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 Alliancebernstein and Nuveen Minnesota into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alliancebernstein National Municipal and Nuveen Minnesota Municipal, you can compare the effects of market volatilities on Alliancebernstein and Nuveen Minnesota 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 Alliancebernstein with a short position of Nuveen Minnesota. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alliancebernstein and Nuveen Minnesota.
Diversification Opportunities for Alliancebernstein and Nuveen Minnesota
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Alliancebernstein and Nuveen is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Alliancebernstein National Mun and Nuveen Minnesota Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Minnesota Mun and Alliancebernstein 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 Alliancebernstein National Municipal are associated (or correlated) with Nuveen Minnesota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Minnesota Mun has no effect on the direction of Alliancebernstein i.e., Alliancebernstein and Nuveen Minnesota go up and down completely randomly.
Pair Corralation between Alliancebernstein and Nuveen Minnesota
Considering the 90-day investment horizon Alliancebernstein National Municipal is expected to generate 2.77 times more return on investment than Nuveen Minnesota. However, Alliancebernstein is 2.77 times more volatile than Nuveen Minnesota Municipal. It trades about 0.04 of its potential returns per unit of risk. Nuveen Minnesota Municipal is currently generating about 0.07 per unit of risk. If you would invest 1,005 in Alliancebernstein National Municipal on August 27, 2024 and sell it today you would earn a total of 117.00 from holding Alliancebernstein National Municipal or generate 11.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alliancebernstein National Mun vs. Nuveen Minnesota Municipal
Performance |
| Timeline |
| Alliancebernstein |
| Nuveen Minnesota Mun |
Alliancebernstein and Nuveen Minnesota Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alliancebernstein and Nuveen Minnesota
The main advantage of trading using opposite Alliancebernstein and Nuveen Minnesota positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alliancebernstein position performs unexpectedly, Nuveen Minnesota 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 Minnesota will offset losses from the drop in Nuveen Minnesota's long position.| Alliancebernstein vs. Eaton Vance Short | Alliancebernstein vs. Allianzgi Diversified Income | Alliancebernstein vs. Ares Dynamic Credit | Alliancebernstein vs. DWS Municipal Income |
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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