Correlation Between Nuveen Arizona and Putnam Sustainable
Can any of the company-specific risk be diversified away by investing in both Nuveen Arizona and Putnam Sustainable 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 Putnam Sustainable 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 Putnam Sustainable Future, you can compare the effects of market volatilities on Nuveen Arizona and Putnam Sustainable 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 Putnam Sustainable. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Arizona and Putnam Sustainable.
Diversification Opportunities for Nuveen Arizona and Putnam Sustainable
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NUVEEN and Putnam is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Arizona Municipal and Putnam Sustainable Future in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Putnam Sustainable Future 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 Putnam Sustainable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Putnam Sustainable Future has no effect on the direction of Nuveen Arizona i.e., Nuveen Arizona and Putnam Sustainable go up and down completely randomly.
Pair Corralation between Nuveen Arizona and Putnam Sustainable
Assuming the 90 days horizon Nuveen Arizona is expected to generate 5.29 times less return on investment than Putnam Sustainable. But when comparing it to its historical volatility, Nuveen Arizona Municipal is 4.37 times less risky than Putnam Sustainable. It trades about 0.07 of its potential returns per unit of risk. Putnam Sustainable Future is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,618 in Putnam Sustainable Future on September 2, 2024 and sell it today you would earn a total of 832.00 from holding Putnam Sustainable Future or generate 51.42% 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. Putnam Sustainable Future
Performance |
| Timeline |
| Nuveen Arizona Municipal |
| Putnam Sustainable Future |
Nuveen Arizona and Putnam Sustainable Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Arizona and Putnam Sustainable
The main advantage of trading using opposite Nuveen Arizona and Putnam Sustainable positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Arizona position performs unexpectedly, Putnam Sustainable 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 Putnam Sustainable will offset losses from the drop in Putnam Sustainable'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 |
| Putnam Sustainable vs. Bbh Intermediate Municipal | Putnam Sustainable vs. Versatile Bond Portfolio | Putnam Sustainable vs. Nuveen Arizona Municipal | Putnam Sustainable vs. Oklahoma Municipal Fund |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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