Correlation Between Nuveen All-american and Nuveen Ohio
Can any of the company-specific risk be diversified away by investing in both Nuveen All-american and Nuveen Ohio 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 Ohio 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 Ohio Municipal, you can compare the effects of market volatilities on Nuveen All-american and Nuveen Ohio 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 Ohio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen All-american and Nuveen Ohio.
Diversification Opportunities for Nuveen All-american and Nuveen Ohio
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nuveen and Nuveen is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen All American Municipal and Nuveen Ohio Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Ohio Municipal 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 Ohio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Ohio Municipal has no effect on the direction of Nuveen All-american i.e., Nuveen All-american and Nuveen Ohio go up and down completely randomly.
Pair Corralation between Nuveen All-american and Nuveen Ohio
Assuming the 90 days horizon Nuveen All American Municipal is expected to generate 1.14 times more return on investment than Nuveen Ohio. However, Nuveen All-american is 1.14 times more volatile than Nuveen Ohio Municipal. It trades about 0.13 of its potential returns per unit of risk. Nuveen Ohio Municipal is currently generating about 0.14 per unit of risk. If you would invest 1,018 in Nuveen All American Municipal on August 28, 2024 and sell it today you would earn a total of 9.00 from holding Nuveen All American Municipal or generate 0.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen All American Municipal vs. Nuveen Ohio Municipal
Performance |
| Timeline |
| Nuveen All American |
| Nuveen Ohio Municipal |
Nuveen All-american and Nuveen Ohio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen All-american and Nuveen Ohio
The main advantage of trading using opposite Nuveen All-american and Nuveen Ohio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen All-american position performs unexpectedly, Nuveen Ohio 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 Ohio will offset losses from the drop in Nuveen Ohio's long position.| Nuveen All-american vs. Nuveen Small Cap | Nuveen All-american vs. Nuveen Real Estate | Nuveen All-american vs. Nuveen Real Estate | Nuveen All-american vs. Nuveen Preferred Securities |
| Nuveen Ohio vs. Franklin Ohio Tax Free | Nuveen Ohio vs. Fidelity Ohio Municipal | Nuveen Ohio vs. Vanguard Ohio Long Term | Nuveen Ohio vs. Eaton Vance Ohio |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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