Correlation Between American Funds and Nuveen Minnesota
Can any of the company-specific risk be diversified away by investing in both American Funds and Nuveen Minnesota 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 American Funds and Nuveen Minnesota into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Funds American and Nuveen Minnesota Municipal, you can compare the effects of market volatilities on American Funds and Nuveen Minnesota 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 American Funds with a short position of Nuveen Minnesota. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Funds and Nuveen Minnesota.
Diversification Opportunities for American Funds and Nuveen Minnesota
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between American and Nuveen is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding American Funds American and Nuveen Minnesota Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Minnesota Mun and American Funds 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 American Funds American are associated (or correlated) with Nuveen Minnesota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Minnesota Mun has no effect on the direction of American Funds i.e., American Funds and Nuveen Minnesota go up and down completely randomly.
Pair Corralation between American Funds and Nuveen Minnesota
Assuming the 90 days horizon American Funds is expected to generate 7.47 times less return on investment than Nuveen Minnesota. In addition to that, American Funds is 1.7 times more volatile than Nuveen Minnesota Municipal. It trades about 0.01 of its total potential returns per unit of risk. Nuveen Minnesota Municipal is currently generating about 0.15 per unit of volatility. If you would invest 1,072 in Nuveen Minnesota Municipal on August 24, 2024 and sell it today you would earn a total of 11.00 from holding Nuveen Minnesota Municipal or generate 1.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Funds American vs. Nuveen Minnesota Municipal
Performance |
| Timeline |
| American Funds American |
| Nuveen Minnesota Mun |
American Funds and Nuveen Minnesota Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Funds and Nuveen Minnesota
The main advantage of trading using opposite American Funds and Nuveen Minnesota positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Funds position performs unexpectedly, Nuveen Minnesota 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 Nuveen Minnesota will offset losses from the drop in Nuveen Minnesota's long position.| American Funds vs. Nuveen Minnesota Municipal | American Funds vs. Metropolitan West Porate | American Funds vs. Georgia Tax Free Bond | American Funds vs. Bbh Intermediate Municipal |
| Nuveen Minnesota vs. Dodge International Stock | Nuveen Minnesota vs. Gmo Equity Allocation | Nuveen Minnesota vs. Scharf Fund Retail | Nuveen Minnesota vs. Artisan Select Equity |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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