Correlation Between Nuveen Arizona and Franklin Arizona
Can any of the company-specific risk be diversified away by investing in both Nuveen Arizona and Franklin Arizona 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 Arizona 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 Arizona Tax Free, you can compare the effects of market volatilities on Nuveen Arizona and Franklin Arizona 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 Arizona. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Arizona and Franklin Arizona.
Diversification Opportunities for Nuveen Arizona and Franklin Arizona
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NUVEEN and Franklin is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Arizona Municipal and Franklin Arizona Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Arizona Tax 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 Arizona. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Arizona Tax has no effect on the direction of Nuveen Arizona i.e., Nuveen Arizona and Franklin Arizona go up and down completely randomly.
Pair Corralation between Nuveen Arizona and Franklin Arizona
Assuming the 90 days horizon Nuveen Arizona is expected to generate 1.09 times less return on investment than Franklin Arizona. But when comparing it to its historical volatility, Nuveen Arizona Municipal is 1.11 times less risky than Franklin Arizona. It trades about 0.14 of its potential returns per unit of risk. Franklin Arizona Tax Free is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 957.00 in Franklin Arizona Tax Free on September 2, 2024 and sell it today you would earn a total of 38.00 from holding Franklin Arizona Tax Free or generate 3.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Arizona Municipal vs. Franklin Arizona Tax Free
Performance |
| Timeline |
| Nuveen Arizona Municipal |
| Franklin Arizona Tax |
Nuveen Arizona and Franklin Arizona Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Arizona and Franklin Arizona
The main advantage of trading using opposite Nuveen Arizona and Franklin Arizona positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Arizona position performs unexpectedly, Franklin Arizona 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 Arizona will offset losses from the drop in Franklin Arizona's long position.| Nuveen Arizona vs. Strategic Allocation Moderate | Nuveen Arizona vs. Saat Moderate Strategy | Nuveen Arizona vs. Tiaa Cref Lifestyle Moderate | Nuveen Arizona vs. Qs Moderate Growth |
| Franklin Arizona vs. Franklin Mutual Beacon | Franklin Arizona vs. Templeton Developing Markets | Franklin Arizona vs. Franklin Mutual Global | Franklin Arizona 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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