Correlation Between Ab Global and Nuveen Municipal
Can any of the company-specific risk be diversified away by investing in both Ab Global 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 Ab Global and Nuveen Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Global Risk and Nuveen Municipal Credit, you can compare the effects of market volatilities on Ab Global 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 Ab Global with a short position of Nuveen Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Nuveen Municipal.
Diversification Opportunities for Ab Global and Nuveen Municipal
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between CABIX and Nuveen is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Risk and Nuveen Municipal Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Municipal Credit and Ab Global 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 Ab Global Risk 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 Credit has no effect on the direction of Ab Global i.e., Ab Global and Nuveen Municipal go up and down completely randomly.
Pair Corralation between Ab Global and Nuveen Municipal
Assuming the 90 days horizon Ab Global Risk is expected to generate 0.63 times more return on investment than Nuveen Municipal. However, Ab Global Risk is 1.6 times less risky than Nuveen Municipal. It trades about 0.35 of its potential returns per unit of risk. Nuveen Municipal Credit is currently generating about 0.19 per unit of risk. If you would invest 1,754 in Ab Global Risk on September 4, 2024 and sell it today you would earn a total of 48.00 from holding Ab Global Risk or generate 2.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global Risk vs. Nuveen Municipal Credit
Performance |
| Timeline |
| Ab Global Risk |
| Nuveen Municipal Credit |
Ab Global and Nuveen Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Nuveen Municipal
The main advantage of trading using opposite Ab Global and Nuveen Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global 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.| Ab Global vs. Ab Global E | Ab Global vs. Ab Global E | Ab Global vs. Ab Minnesota Portfolio | Ab Global vs. Ab Minnesota Portfolio |
| Nuveen Municipal vs. Vanguard Total Stock | Nuveen Municipal vs. Vanguard 500 Index | Nuveen Municipal vs. Vanguard Total Stock | Nuveen Municipal vs. Vanguard Total Stock |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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