Correlation Between Nuveen All-american and Nuveen Louisiana
Can any of the company-specific risk be diversified away by investing in both Nuveen All-american and Nuveen Louisiana 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 All-american and Nuveen Louisiana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen All American Municipal and Nuveen Louisiana Municipal, you can compare the effects of market volatilities on Nuveen All-american and Nuveen Louisiana 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 All-american with a short position of Nuveen Louisiana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen All-american and Nuveen Louisiana.
Diversification Opportunities for Nuveen All-american and Nuveen Louisiana
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Nuveen and Nuveen is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen All American Municipal and Nuveen Louisiana Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Louisiana Mun and Nuveen All-american 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 All American Municipal are associated (or correlated) with Nuveen Louisiana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Louisiana Mun has no effect on the direction of Nuveen All-american i.e., Nuveen All-american and Nuveen Louisiana go up and down completely randomly.
Pair Corralation between Nuveen All-american and Nuveen Louisiana
Assuming the 90 days horizon Nuveen All American Municipal is expected to under-perform the Nuveen Louisiana. But the mutual fund apears to be less risky and, when comparing its historical volatility, Nuveen All American Municipal is 1.01 times less risky than Nuveen Louisiana. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Nuveen Louisiana Municipal is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 1,048 in Nuveen Louisiana Municipal on November 2, 2024 and sell it today you would lose (1.00) from holding Nuveen Louisiana Municipal or give up 0.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen All American Municipal vs. Nuveen Louisiana Municipal
Performance |
| Timeline |
| Nuveen All American |
| Nuveen Louisiana Mun |
Nuveen All-american and Nuveen Louisiana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen All-american and Nuveen Louisiana
The main advantage of trading using opposite Nuveen All-american and Nuveen Louisiana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen All-american position performs unexpectedly, Nuveen Louisiana 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 Louisiana will offset losses from the drop in Nuveen Louisiana's long position.| Nuveen All-american vs. Bbh Intermediate Municipal | Nuveen All-american vs. Hartford Municipal Short | Nuveen All-american vs. Blrc Sgy Mnp | Nuveen All-american vs. Legg Mason Partners |
| Nuveen Louisiana vs. Smead Value Fund | Nuveen Louisiana vs. Fidelity Large Cap | Nuveen Louisiana vs. Avantis Large Cap | Nuveen Louisiana vs. Touchstone Large Cap |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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