Correlation Between Nuveen Arizona and Aberdeen Emerging
Can any of the company-specific risk be diversified away by investing in both Nuveen Arizona and Aberdeen Emerging 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 Aberdeen Emerging 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 Aberdeen Emerging Markets, you can compare the effects of market volatilities on Nuveen Arizona and Aberdeen Emerging 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 Aberdeen Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Arizona and Aberdeen Emerging.
Diversification Opportunities for Nuveen Arizona and Aberdeen Emerging
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nuveen and Aberdeen is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Arizona Municipal and Aberdeen Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberdeen Emerging Markets 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 Aberdeen Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberdeen Emerging Markets has no effect on the direction of Nuveen Arizona i.e., Nuveen Arizona and Aberdeen Emerging go up and down completely randomly.
Pair Corralation between Nuveen Arizona and Aberdeen Emerging
Assuming the 90 days horizon Nuveen Arizona is expected to generate 1.46 times less return on investment than Aberdeen Emerging. But when comparing it to its historical volatility, Nuveen Arizona Municipal is 3.93 times less risky than Aberdeen Emerging. It trades about 0.07 of its potential returns per unit of risk. Aberdeen Emerging Markets is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,249 in Aberdeen Emerging Markets on September 3, 2024 and sell it today you would earn a total of 129.00 from holding Aberdeen Emerging Markets or generate 10.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Arizona Municipal vs. Aberdeen Emerging Markets
Performance |
| Timeline |
| Nuveen Arizona Municipal |
| Aberdeen Emerging Markets |
Nuveen Arizona and Aberdeen Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Arizona and Aberdeen Emerging
The main advantage of trading using opposite Nuveen Arizona and Aberdeen Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Arizona position performs unexpectedly, Aberdeen Emerging 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 Aberdeen Emerging will offset losses from the drop in Aberdeen Emerging's long position.| Nuveen Arizona vs. Wt Mutual Fund | Nuveen Arizona vs. Franklin Government Money | Nuveen Arizona vs. John Hancock Money | Nuveen Arizona vs. Prudential Government Money |
| Aberdeen Emerging vs. Transamerica Funds | Aberdeen Emerging vs. California High Yield Municipal | Aberdeen Emerging vs. Franklin High Yield | Aberdeen Emerging vs. T Rowe Price |
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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