Correlation Between Bank of America and Nuveen Limited
Can any of the company-specific risk be diversified away by investing in both Bank of America and Nuveen Limited 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 Bank of America and Nuveen Limited into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of America and Nuveen Limited Term, you can compare the effects of market volatilities on Bank of America and Nuveen Limited 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 Bank of America with a short position of Nuveen Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Nuveen Limited.
Diversification Opportunities for Bank of America and Nuveen Limited
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Bank and Nuveen is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Nuveen Limited Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Limited Term and Bank of America 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 Bank of America are associated (or correlated) with Nuveen Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Limited Term has no effect on the direction of Bank of America i.e., Bank of America and Nuveen Limited go up and down completely randomly.
Pair Corralation between Bank of America and Nuveen Limited
Considering the 90-day investment horizon Bank of America is expected to generate 11.0 times more return on investment than Nuveen Limited. However, Bank of America is 11.0 times more volatile than Nuveen Limited Term. It trades about 0.08 of its potential returns per unit of risk. Nuveen Limited Term is currently generating about 0.09 per unit of risk. If you would invest 2,714 in Bank of America on December 1, 2024 and sell it today you would earn a total of 1,896 from holding Bank of America or generate 69.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of America vs. Nuveen Limited Term
Performance |
| Timeline |
| Bank of America |
| Nuveen Limited Term |
Bank of America and Nuveen Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Nuveen Limited
The main advantage of trading using opposite Bank of America and Nuveen Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Nuveen Limited 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 Limited will offset losses from the drop in Nuveen Limited's long position.| Bank of America vs. Citigroup | Bank of America vs. Wells Fargo | Bank of America vs. Toronto Dominion Bank | Bank of America vs. Royal Bank of |
| Nuveen Limited vs. Nuveen Minnesota Municipal | Nuveen Limited vs. Nuveen Symphony Floating | Nuveen Limited vs. Nuveen Symphony Floating | Nuveen Limited vs. Nuveen Symphony Floating |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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