Correlation Between DTF Tax and Nuveen Core
Can any of the company-specific risk be diversified away by investing in both DTF Tax and Nuveen Core 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 DTF Tax and Nuveen Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DTF Tax Free and Nuveen Core Equity, you can compare the effects of market volatilities on DTF Tax and Nuveen Core 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 DTF Tax with a short position of Nuveen Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of DTF Tax and Nuveen Core.
Diversification Opportunities for DTF Tax and Nuveen Core
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DTF and Nuveen is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding DTF Tax Free and Nuveen Core Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Core Equity and DTF Tax 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 DTF Tax Free are associated (or correlated) with Nuveen Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Core Equity has no effect on the direction of DTF Tax i.e., DTF Tax and Nuveen Core go up and down completely randomly.
Pair Corralation between DTF Tax and Nuveen Core
Considering the 90-day investment horizon DTF Tax is expected to generate 3.32 times less return on investment than Nuveen Core. But when comparing it to its historical volatility, DTF Tax Free is 2.09 times less risky than Nuveen Core. It trades about 0.07 of its potential returns per unit of risk. Nuveen Core Equity is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,520 in Nuveen Core Equity on August 28, 2024 and sell it today you would earn a total of 50.00 from holding Nuveen Core Equity or generate 3.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DTF Tax Free vs. Nuveen Core Equity
Performance |
| Timeline |
| DTF Tax Free |
| Nuveen Core Equity |
DTF Tax and Nuveen Core Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DTF Tax and Nuveen Core
The main advantage of trading using opposite DTF Tax and Nuveen Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DTF Tax position performs unexpectedly, Nuveen Core 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 Core will offset losses from the drop in Nuveen Core's long position.| DTF Tax vs. Aurora Innovation | DTF Tax vs. HUMANA INC | DTF Tax vs. Aquagold International | DTF Tax vs. Barloworld Ltd ADR |
| Nuveen Core vs. Brandywineglobal Globalome Opportunities | Nuveen Core vs. Western Asset Global | Nuveen Core vs. Pioneer Floating Rate | Nuveen Core vs. Nuveen Real Asset |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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