Correlation Between Bank of America and Nuveen Massachusetts
Can any of the company-specific risk be diversified away by investing in both Bank of America and Nuveen Massachusetts 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 Massachusetts 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 Massachusetts Municipal, you can compare the effects of market volatilities on Bank of America and Nuveen Massachusetts 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 Massachusetts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of America and Nuveen Massachusetts.
Diversification Opportunities for Bank of America and Nuveen Massachusetts
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bank and Nuveen is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Bank of America and Nuveen Massachusetts Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Massachusetts 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 Massachusetts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Massachusetts has no effect on the direction of Bank of America i.e., Bank of America and Nuveen Massachusetts go up and down completely randomly.
Pair Corralation between Bank of America and Nuveen Massachusetts
Considering the 90-day investment horizon Bank of America is expected to generate 6.97 times more return on investment than Nuveen Massachusetts. However, Bank of America is 6.97 times more volatile than Nuveen Massachusetts Municipal. It trades about 0.05 of its potential returns per unit of risk. Nuveen Massachusetts Municipal is currently generating about 0.08 per unit of risk. If you would invest 3,916 in Bank of America on November 28, 2024 and sell it today you would earn a total of 478.00 from holding Bank of America or generate 12.21% 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 Massachusetts Municipal
Performance |
| Timeline |
| Bank of America |
| Nuveen Massachusetts |
Bank of America and Nuveen Massachusetts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of America and Nuveen Massachusetts
The main advantage of trading using opposite Bank of America and Nuveen Massachusetts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of America position performs unexpectedly, Nuveen Massachusetts 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 Massachusetts will offset losses from the drop in Nuveen Massachusetts' 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 Massachusetts vs. Washington Mutual Investors | Nuveen Massachusetts vs. T Rowe Price | Nuveen Massachusetts vs. The Hartford Servative | Nuveen Massachusetts vs. Franklin Moderate Allocation |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Positions Ratings 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 |