Correlation Between The National and Nuveen All-american
Can any of the company-specific risk be diversified away by investing in both The National and Nuveen All-american 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 The National and Nuveen All-american into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The National Tax Free and Nuveen All American Municipal, you can compare the effects of market volatilities on The National and Nuveen All-american 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 The National with a short position of Nuveen All-american. Check out your portfolio center. Please also check ongoing floating volatility patterns of The National and Nuveen All-american.
Diversification Opportunities for The National and Nuveen All-american
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between The and Nuveen is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding The National Tax Free and Nuveen All American Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen All American and The National 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 The National Tax Free are associated (or correlated) with Nuveen All-american. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen All American has no effect on the direction of The National i.e., The National and Nuveen All-american go up and down completely randomly.
Pair Corralation between The National and Nuveen All-american
Assuming the 90 days horizon The National is expected to generate 1.52 times less return on investment than Nuveen All-american. But when comparing it to its historical volatility, The National Tax Free is 1.22 times less risky than Nuveen All-american. It trades about 0.08 of its potential returns per unit of risk. Nuveen All American Municipal is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 977.00 in Nuveen All American Municipal on September 2, 2024 and sell it today you would earn a total of 49.00 from holding Nuveen All American Municipal or generate 5.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The National Tax Free vs. Nuveen All American Municipal
Performance |
| Timeline |
| National Tax |
| Nuveen All American |
The National and Nuveen All-american Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with The National and Nuveen All-american
The main advantage of trading using opposite The National and Nuveen All-american positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The National position performs unexpectedly, Nuveen All-american 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 All-american will offset losses from the drop in Nuveen All-american's long position.| The National vs. The Missouri Tax Free | The National vs. The Bond Fund | The National vs. High Yield Municipal Fund | The National vs. Fidelity Intermediate Municipal |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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