Correlation Between Nuveen Arizona and Franklin High
Can any of the company-specific risk be diversified away by investing in both Nuveen Arizona and Franklin High 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 Arizona and Franklin High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Arizona Municipal and Franklin High Yield, you can compare the effects of market volatilities on Nuveen Arizona and Franklin High 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 Arizona with a short position of Franklin High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Arizona and Franklin High.
Diversification Opportunities for Nuveen Arizona and Franklin High
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nuveen and Franklin is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Arizona Municipal and Franklin High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin High Yield and Nuveen Arizona 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 Arizona Municipal are associated (or correlated) with Franklin High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin High Yield has no effect on the direction of Nuveen Arizona i.e., Nuveen Arizona and Franklin High go up and down completely randomly.
Pair Corralation between Nuveen Arizona and Franklin High
Assuming the 90 days horizon Nuveen Arizona Municipal is expected to generate 0.79 times more return on investment than Franklin High. However, Nuveen Arizona Municipal is 1.26 times less risky than Franklin High. It trades about 0.26 of its potential returns per unit of risk. Franklin High Yield is currently generating about 0.17 per unit of risk. If you would invest 1,013 in Nuveen Arizona Municipal on September 4, 2024 and sell it today you would earn a total of 16.00 from holding Nuveen Arizona Municipal or generate 1.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Nuveen Arizona Municipal vs. Franklin High Yield
Performance |
| Timeline |
| Nuveen Arizona Municipal |
| Franklin High Yield |
Nuveen Arizona and Franklin High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Arizona and Franklin High
The main advantage of trading using opposite Nuveen Arizona and Franklin High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Arizona position performs unexpectedly, Franklin High 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 Franklin High will offset losses from the drop in Franklin High's long position.| Nuveen Arizona vs. Prudential High Yield | Nuveen Arizona vs. Alpine High Yield | Nuveen Arizona vs. Gmo High Yield | Nuveen Arizona vs. T Rowe Price |
| Franklin High vs. Franklin Mutual Beacon | Franklin High vs. Templeton Developing Markets | Franklin High vs. Franklin Mutual Global | Franklin High vs. Franklin Mutual Global |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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