Correlation Between DTF Tax and Nuveen Amt
Can any of the company-specific risk be diversified away by investing in both DTF Tax and Nuveen Amt 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 Amt 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 Amt Free, you can compare the effects of market volatilities on DTF Tax and Nuveen Amt 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 Amt. Check out your portfolio center. Please also check ongoing floating volatility patterns of DTF Tax and Nuveen Amt.
Diversification Opportunities for DTF Tax and Nuveen Amt
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between DTF and Nuveen is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding DTF Tax Free and Nuveen Amt Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Amt Free 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 Amt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Amt Free has no effect on the direction of DTF Tax i.e., DTF Tax and Nuveen Amt go up and down completely randomly.
Pair Corralation between DTF Tax and Nuveen Amt
Considering the 90-day investment horizon DTF Tax is expected to generate 2.26 times less return on investment than Nuveen Amt. But when comparing it to its historical volatility, DTF Tax Free is 1.08 times less risky than Nuveen Amt. It trades about 0.03 of its potential returns per unit of risk. Nuveen Amt Free is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,090 in Nuveen Amt Free on September 2, 2024 and sell it today you would earn a total of 234.00 from holding Nuveen Amt Free or generate 21.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
DTF Tax Free vs. Nuveen Amt Free
Performance |
| Timeline |
| DTF Tax Free |
| Nuveen Amt Free |
DTF Tax and Nuveen Amt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DTF Tax and Nuveen Amt
The main advantage of trading using opposite DTF Tax and Nuveen Amt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DTF Tax position performs unexpectedly, Nuveen Amt 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 Amt will offset losses from the drop in Nuveen Amt's long position.| DTF Tax vs. MFS Investment Grade | DTF Tax vs. Eaton Vance National | DTF Tax vs. Invesco High Income | DTF Tax vs. MFS High Yield |
| Nuveen Amt vs. MFS Investment Grade | Nuveen Amt vs. Eaton Vance Municipal | Nuveen Amt vs. DTF Tax Free | Nuveen Amt 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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