Correlation Between Ishares Municipal and Nuveen Winslow
Can any of the company-specific risk be diversified away by investing in both Ishares Municipal and Nuveen Winslow 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 Ishares Municipal and Nuveen Winslow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ishares Municipal Bond and Nuveen Winslow Large Cap, you can compare the effects of market volatilities on Ishares Municipal and Nuveen Winslow 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 Ishares Municipal with a short position of Nuveen Winslow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ishares Municipal and Nuveen Winslow.
Diversification Opportunities for Ishares Municipal and Nuveen Winslow
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ishares and Nuveen is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Ishares Municipal Bond and Nuveen Winslow Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Winslow Large and Ishares Municipal 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 Ishares Municipal Bond are associated (or correlated) with Nuveen Winslow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Winslow Large has no effect on the direction of Ishares Municipal i.e., Ishares Municipal and Nuveen Winslow go up and down completely randomly.
Pair Corralation between Ishares Municipal and Nuveen Winslow
Assuming the 90 days horizon Ishares Municipal is expected to generate 4.04 times less return on investment than Nuveen Winslow. But when comparing it to its historical volatility, Ishares Municipal Bond is 5.43 times less risky than Nuveen Winslow. It trades about 0.15 of its potential returns per unit of risk. Nuveen Winslow Large Cap is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 4,666 in Nuveen Winslow Large Cap on September 1, 2024 and sell it today you would earn a total of 1,819 from holding Nuveen Winslow Large Cap or generate 38.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Ishares Municipal Bond vs. Nuveen Winslow Large Cap
Performance |
| Timeline |
| Ishares Municipal Bond |
| Nuveen Winslow Large |
Ishares Municipal and Nuveen Winslow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ishares Municipal and Nuveen Winslow
The main advantage of trading using opposite Ishares Municipal and Nuveen Winslow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ishares Municipal position performs unexpectedly, Nuveen Winslow 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 Winslow will offset losses from the drop in Nuveen Winslow's long position.| Ishares Municipal vs. Ultra Short Fixed Income | Ishares Municipal vs. Icon Equity Income | Ishares Municipal vs. The Gabelli Equity | Ishares Municipal vs. Us Vector Equity |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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