Correlation Between Nuveen Pennsylvania and Dunham Large
Can any of the company-specific risk be diversified away by investing in both Nuveen Pennsylvania and Dunham Large 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 Pennsylvania and Dunham Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Pennsylvania Municipal and Dunham Large Cap, you can compare the effects of market volatilities on Nuveen Pennsylvania and Dunham Large 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 Pennsylvania with a short position of Dunham Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Pennsylvania and Dunham Large.
Diversification Opportunities for Nuveen Pennsylvania and Dunham Large
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nuveen and Dunham is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Pennsylvania Municipal and Dunham Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dunham Large Cap and Nuveen Pennsylvania 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 Pennsylvania Municipal are associated (or correlated) with Dunham Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dunham Large Cap has no effect on the direction of Nuveen Pennsylvania i.e., Nuveen Pennsylvania and Dunham Large go up and down completely randomly.
Pair Corralation between Nuveen Pennsylvania and Dunham Large
Assuming the 90 days horizon Nuveen Pennsylvania is expected to generate 3.23 times less return on investment than Dunham Large. But when comparing it to its historical volatility, Nuveen Pennsylvania Municipal is 1.91 times less risky than Dunham Large. It trades about 0.22 of its potential returns per unit of risk. Dunham Large Cap is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest 2,024 in Dunham Large Cap on September 4, 2024 and sell it today you would earn a total of 112.00 from holding Dunham Large Cap or generate 5.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Nuveen Pennsylvania Municipal vs. Dunham Large Cap
Performance |
| Timeline |
| Nuveen Pennsylvania |
| Dunham Large Cap |
Nuveen Pennsylvania and Dunham Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Pennsylvania and Dunham Large
The main advantage of trading using opposite Nuveen Pennsylvania and Dunham Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Pennsylvania position performs unexpectedly, Dunham Large 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 Dunham Large will offset losses from the drop in Dunham Large's long position.| Nuveen Pennsylvania vs. Nuveen Small Cap | Nuveen Pennsylvania vs. Nuveen Real Estate | Nuveen Pennsylvania vs. Nuveen Real Estate | Nuveen Pennsylvania vs. Nuveen Preferred Securities |
| Dunham Large vs. Energy Basic Materials | Dunham Large vs. Jennison Natural Resources | Dunham Large vs. Clearbridge Energy Mlp | Dunham Large vs. Hennessy Bp Energy |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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