Correlation Between Nuveen Small and Nuveen All-american
Can any of the company-specific risk be diversified away by investing in both Nuveen Small 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 Nuveen Small 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 Nuveen Small Cap and Nuveen All American Municipal, you can compare the effects of market volatilities on Nuveen Small 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 Nuveen Small with a short position of Nuveen All-american. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Small and Nuveen All-american.
Diversification Opportunities for Nuveen Small and Nuveen All-american
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nuveen and Nuveen is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Small Cap 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 Nuveen Small 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 Nuveen Small Cap 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 Nuveen Small i.e., Nuveen Small and Nuveen All-american go up and down completely randomly.
Pair Corralation between Nuveen Small and Nuveen All-american
Assuming the 90 days horizon Nuveen Small Cap is expected to generate 5.01 times more return on investment than Nuveen All-american. However, Nuveen Small is 5.01 times more volatile than Nuveen All American Municipal. It trades about 0.07 of its potential returns per unit of risk. Nuveen All American Municipal is currently generating about 0.07 per unit of risk. If you would invest 801.00 in Nuveen Small Cap on August 31, 2024 and sell it today you would earn a total of 364.00 from holding Nuveen Small Cap or generate 45.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Small Cap vs. Nuveen All American Municipal
Performance |
| Timeline |
| Nuveen Small Cap |
| Nuveen All American |
Nuveen Small and Nuveen All-american Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Small and Nuveen All-american
The main advantage of trading using opposite Nuveen Small and Nuveen All-american positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Small 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.| Nuveen Small vs. California High Yield Municipal | Nuveen Small vs. Old Westbury Municipal | Nuveen Small vs. Franklin High Yield | Nuveen Small vs. Morningstar Municipal Bond |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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