Correlation Between Nuveen Kansas and Firsthand Alternative
Can any of the company-specific risk be diversified away by investing in both Nuveen Kansas and Firsthand Alternative 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 Kansas and Firsthand Alternative into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Kansas Municipal and Firsthand Alternative Energy, you can compare the effects of market volatilities on Nuveen Kansas and Firsthand Alternative 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 Kansas with a short position of Firsthand Alternative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Kansas and Firsthand Alternative.
Diversification Opportunities for Nuveen Kansas and Firsthand Alternative
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Nuveen and Firsthand is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Kansas Municipal and Firsthand Alternative Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firsthand Alternative and Nuveen Kansas 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 Kansas Municipal are associated (or correlated) with Firsthand Alternative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firsthand Alternative has no effect on the direction of Nuveen Kansas i.e., Nuveen Kansas and Firsthand Alternative go up and down completely randomly.
Pair Corralation between Nuveen Kansas and Firsthand Alternative
Assuming the 90 days horizon Nuveen Kansas is expected to generate 2.44 times less return on investment than Firsthand Alternative. But when comparing it to its historical volatility, Nuveen Kansas Municipal is 9.44 times less risky than Firsthand Alternative. It trades about 0.06 of its potential returns per unit of risk. Firsthand Alternative Energy is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 986.00 in Firsthand Alternative Energy on September 4, 2024 and sell it today you would earn a total of 34.00 from holding Firsthand Alternative Energy or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Kansas Municipal vs. Firsthand Alternative Energy
Performance |
| Timeline |
| Nuveen Kansas Municipal |
| Firsthand Alternative |
Nuveen Kansas and Firsthand Alternative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Kansas and Firsthand Alternative
The main advantage of trading using opposite Nuveen Kansas and Firsthand Alternative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Kansas position performs unexpectedly, Firsthand Alternative 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 Firsthand Alternative will offset losses from the drop in Firsthand Alternative's long position.| Nuveen Kansas vs. Firsthand Alternative Energy | Nuveen Kansas vs. Hennessy Bp Energy | Nuveen Kansas vs. World Energy Fund | Nuveen Kansas vs. Salient Mlp Energy |
| Firsthand Alternative vs. Guinness Atkinson Alternative | Firsthand Alternative vs. Calvert Global Energy | Firsthand Alternative vs. New Alternatives Fund | Firsthand Alternative vs. Shelton Green Alpha |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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