Correlation Between Federated Investors and Nuveen California
Can any of the company-specific risk be diversified away by investing in both Federated Investors and Nuveen California 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 Federated Investors and Nuveen California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Investors B and Nuveen California Amt, you can compare the effects of market volatilities on Federated Investors and Nuveen California 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 Federated Investors with a short position of Nuveen California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Investors and Nuveen California.
Diversification Opportunities for Federated Investors and Nuveen California
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Federated and Nuveen is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Federated Investors B and Nuveen California Amt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen California Amt and Federated Investors 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 Federated Investors B are associated (or correlated) with Nuveen California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen California Amt has no effect on the direction of Federated Investors i.e., Federated Investors and Nuveen California go up and down completely randomly.
Pair Corralation between Federated Investors and Nuveen California
Considering the 90-day investment horizon Federated Investors B is expected to generate 2.2 times more return on investment than Nuveen California. However, Federated Investors is 2.2 times more volatile than Nuveen California Amt. It trades about 0.27 of its potential returns per unit of risk. Nuveen California Amt is currently generating about -0.14 per unit of risk. If you would invest 3,972 in Federated Investors B on September 4, 2024 and sell it today you would earn a total of 274.00 from holding Federated Investors B or generate 6.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Investors B vs. Nuveen California Amt
Performance |
| Timeline |
| Federated Investors |
| Nuveen California Amt |
Federated Investors and Nuveen California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Investors and Nuveen California
The main advantage of trading using opposite Federated Investors and Nuveen California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Investors position performs unexpectedly, Nuveen California 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 California will offset losses from the drop in Nuveen California's long position.| Federated Investors vs. Federated Premier Municipal | Federated Investors vs. Blackrock Muniyield | Federated Investors vs. Diamond Hill Investment | Federated Investors vs. NXG NextGen Infrastructure |
| Nuveen California vs. BlackRock California Municipal | Nuveen California vs. Blackrock Muniyield Quality | Nuveen California vs. Blackrock Muni Intermediate | Nuveen California vs. Munivest 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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