Correlation Between Citizens and Nuveen California
Can any of the company-specific risk be diversified away by investing in both Citizens and Nuveen California 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 Citizens and Nuveen California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Citizens and Nuveen California Municipal, you can compare the effects of market volatilities on Citizens and Nuveen California 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 Citizens with a short position of Nuveen California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Citizens and Nuveen California.
Diversification Opportunities for Citizens and Nuveen California
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Citizens and Nuveen is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Citizens and Nuveen California Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen California and Citizens 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 Citizens are associated (or correlated) with Nuveen California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen California has no effect on the direction of Citizens i.e., Citizens and Nuveen California go up and down completely randomly.
Pair Corralation between Citizens and Nuveen California
Considering the 90-day investment horizon Citizens is expected to under-perform the Nuveen California. In addition to that, Citizens is 17.88 times more volatile than Nuveen California Municipal. It trades about -0.28 of its total potential returns per unit of risk. Nuveen California Municipal is currently generating about -0.11 per unit of volatility. If you would invest 1,009 in Nuveen California Municipal on December 8, 2024 and sell it today you would lose (5.00) from holding Nuveen California Municipal or give up 0.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Citizens vs. Nuveen California Municipal
Performance |
| Timeline |
| Citizens |
| Nuveen California |
Citizens and Nuveen California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Citizens and Nuveen California
The main advantage of trading using opposite Citizens and Nuveen California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Citizens position performs unexpectedly, Nuveen California 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 California will offset losses from the drop in Nuveen California's long position.| Citizens vs. CNO Financial Group | ||
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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