Correlation Between Cisco Systems and Nuveen Select
Can any of the company-specific risk be diversified away by investing in both Cisco Systems and Nuveen Select 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 Cisco Systems and Nuveen Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cisco Systems and Nuveen Select Tax Free, you can compare the effects of market volatilities on Cisco Systems and Nuveen Select 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 Cisco Systems with a short position of Nuveen Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cisco Systems and Nuveen Select.
Diversification Opportunities for Cisco Systems and Nuveen Select
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cisco and Nuveen is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Cisco Systems and Nuveen Select Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Select Tax and Cisco Systems 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 Cisco Systems are associated (or correlated) with Nuveen Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Select Tax has no effect on the direction of Cisco Systems i.e., Cisco Systems and Nuveen Select go up and down completely randomly.
Pair Corralation between Cisco Systems and Nuveen Select
Given the investment horizon of 90 days Cisco Systems is expected to generate 1.67 times more return on investment than Nuveen Select. However, Cisco Systems is 1.67 times more volatile than Nuveen Select Tax Free. It trades about 0.27 of its potential returns per unit of risk. Nuveen Select Tax Free is currently generating about -0.07 per unit of risk. If you would invest 5,528 in Cisco Systems on August 28, 2024 and sell it today you would earn a total of 346.00 from holding Cisco Systems or generate 6.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cisco Systems vs. Nuveen Select Tax Free
Performance |
| Timeline |
| Cisco Systems |
| Nuveen Select Tax |
Cisco Systems and Nuveen Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cisco Systems and Nuveen Select
The main advantage of trading using opposite Cisco Systems and Nuveen Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cisco Systems position performs unexpectedly, Nuveen Select 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 Select will offset losses from the drop in Nuveen Select's long position.| Cisco Systems vs. Ichor Holdings | Cisco Systems vs. Fabrinet | Cisco Systems vs. Hello Group | Cisco Systems vs. Ultra Clean Holdings |
| Nuveen Select vs. PowerUp Acquisition Corp | Nuveen Select vs. Aurora Innovation | Nuveen Select vs. HUMANA INC | Nuveen Select vs. Aquagold International |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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