Correlation Between Nuveen Arizona and Prudential Muni
Can any of the company-specific risk be diversified away by investing in both Nuveen Arizona and Prudential Muni 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 Prudential Muni 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 Prudential Muni High, you can compare the effects of market volatilities on Nuveen Arizona and Prudential Muni 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 Prudential Muni. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Arizona and Prudential Muni.
Diversification Opportunities for Nuveen Arizona and Prudential Muni
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nuveen and Prudential is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Arizona Municipal and Prudential Muni High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Muni High 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 Prudential Muni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Muni High has no effect on the direction of Nuveen Arizona i.e., Nuveen Arizona and Prudential Muni go up and down completely randomly.
Pair Corralation between Nuveen Arizona and Prudential Muni
Assuming the 90 days horizon Nuveen Arizona is expected to generate 1.24 times less return on investment than Prudential Muni. In addition to that, Nuveen Arizona is 1.04 times more volatile than Prudential Muni High. It trades about 0.12 of its total potential returns per unit of risk. Prudential Muni High is currently generating about 0.16 per unit of volatility. If you would invest 947.00 in Prudential Muni High on December 1, 2024 and sell it today you would earn a total of 7.00 from holding Prudential Muni High or generate 0.74% 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. Prudential Muni High
Performance |
| Timeline |
| Nuveen Arizona Municipal |
| Prudential Muni High |
Nuveen Arizona and Prudential Muni Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Arizona and Prudential Muni
The main advantage of trading using opposite Nuveen Arizona and Prudential Muni positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Arizona position performs unexpectedly, Prudential Muni 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 Prudential Muni will offset losses from the drop in Prudential Muni's long position.| Nuveen Arizona vs. Ultra Short Fixed Income | Nuveen Arizona vs. Tax Managed International Equity | Nuveen Arizona vs. Gmo Global Equity | Nuveen Arizona vs. Guidemark E Fixed |
| Prudential Muni vs. John Hancock Government | Prudential Muni vs. Aig Government Money | Prudential Muni vs. Franklin Adjustable Government | Prudential Muni vs. Legg Mason Partners |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Stocks Directory Find actively traded stocks across global markets | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |