Correlation Between Nuveen Michigan and Nuveen New
Can any of the company-specific risk be diversified away by investing in both Nuveen Michigan and Nuveen New 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 Michigan and Nuveen New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Michigan Municipal and Nuveen New York, you can compare the effects of market volatilities on Nuveen Michigan and Nuveen New 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 Michigan with a short position of Nuveen New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Michigan and Nuveen New.
Diversification Opportunities for Nuveen Michigan and Nuveen New
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 Michigan Municipal and Nuveen New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen New York and Nuveen Michigan 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 Michigan Municipal are associated (or correlated) with Nuveen New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen New York has no effect on the direction of Nuveen Michigan i.e., Nuveen Michigan and Nuveen New go up and down completely randomly.
Pair Corralation between Nuveen Michigan and Nuveen New
Assuming the 90 days horizon Nuveen Michigan is expected to generate 1.18 times less return on investment than Nuveen New. But when comparing it to its historical volatility, Nuveen Michigan Municipal is 1.12 times less risky than Nuveen New. It trades about 0.19 of its potential returns per unit of risk. Nuveen New York is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 976.00 in Nuveen New York on August 30, 2024 and sell it today you would earn a total of 16.00 from holding Nuveen New York or generate 1.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Nuveen Michigan Municipal vs. Nuveen New York
Performance |
| Timeline |
| Nuveen Michigan Municipal |
| Nuveen New York |
Nuveen Michigan and Nuveen New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Michigan and Nuveen New
The main advantage of trading using opposite Nuveen Michigan and Nuveen New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Michigan position performs unexpectedly, Nuveen New 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 New will offset losses from the drop in Nuveen New's long position.| Nuveen Michigan vs. Conservative Balanced Allocation | Nuveen Michigan vs. Massmutual Select Diversified | Nuveen Michigan vs. Huber Capital Diversified | Nuveen Michigan vs. Lord Abbett Diversified |
| Nuveen New vs. Tekla Healthcare Opportunities | Nuveen New vs. Prudential Health Sciences | Nuveen New vs. Hartford Healthcare Hls | Nuveen New vs. Baron Health Care |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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