Correlation Between First American and Nuveen Ohio
Can any of the company-specific risk be diversified away by investing in both First American and Nuveen Ohio 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 First American and Nuveen Ohio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First American Investment and Nuveen Ohio Municipal, you can compare the effects of market volatilities on First American and Nuveen Ohio 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 First American with a short position of Nuveen Ohio. Check out your portfolio center. Please also check ongoing floating volatility patterns of First American and Nuveen Ohio.
Diversification Opportunities for First American and Nuveen Ohio
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between First and Nuveen is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding First American Investment and Nuveen Ohio Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Ohio Municipal and First American 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 First American Investment are associated (or correlated) with Nuveen Ohio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Ohio Municipal has no effect on the direction of First American i.e., First American and Nuveen Ohio go up and down completely randomly.
Pair Corralation between First American and Nuveen Ohio
Assuming the 90 days horizon First American Investment is expected to generate 5.29 times more return on investment than Nuveen Ohio. However, First American is 5.29 times more volatile than Nuveen Ohio Municipal. It trades about 0.06 of its potential returns per unit of risk. Nuveen Ohio Municipal is currently generating about 0.05 per unit of risk. If you would invest 2,658 in First American Investment on August 28, 2024 and sell it today you would earn a total of 958.00 from holding First American Investment or generate 36.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First American Investment vs. Nuveen Ohio Municipal
Performance |
| Timeline |
| First American Investment |
| Nuveen Ohio Municipal |
First American and Nuveen Ohio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First American and Nuveen Ohio
The main advantage of trading using opposite First American and Nuveen Ohio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First American position performs unexpectedly, Nuveen Ohio 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 Ohio will offset losses from the drop in Nuveen Ohio's long position.| First American vs. Nuveen Mid Cap | First American vs. Nuveen Mid Cap | First American vs. Nuveen Small Cap | First American vs. Nuveen Small Cap |
| Nuveen Ohio vs. Ab Select Equity | Nuveen Ohio vs. Small Cap Equity | Nuveen Ohio vs. Scharf Fund Retail | Nuveen Ohio vs. Gmo Global 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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