Correlation Between Nuveen Louisiana and Nuveen Santa
Can any of the company-specific risk be diversified away by investing in both Nuveen Louisiana and Nuveen Santa 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 Louisiana and Nuveen Santa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Louisiana Municipal and Nuveen Santa Barbara, you can compare the effects of market volatilities on Nuveen Louisiana and Nuveen Santa 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 Louisiana with a short position of Nuveen Santa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Louisiana and Nuveen Santa.
Diversification Opportunities for Nuveen Louisiana and Nuveen Santa
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nuveen and Nuveen is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Louisiana Municipal and Nuveen Santa Barbara in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Santa Barbara and Nuveen Louisiana 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 Louisiana Municipal are associated (or correlated) with Nuveen Santa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Santa Barbara has no effect on the direction of Nuveen Louisiana i.e., Nuveen Louisiana and Nuveen Santa go up and down completely randomly.
Pair Corralation between Nuveen Louisiana and Nuveen Santa
Assuming the 90 days horizon Nuveen Louisiana is expected to generate 4.92 times less return on investment than Nuveen Santa. But when comparing it to its historical volatility, Nuveen Louisiana Municipal is 2.7 times less risky than Nuveen Santa. It trades about 0.06 of its potential returns per unit of risk. Nuveen Santa Barbara is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,966 in Nuveen Santa Barbara on September 1, 2024 and sell it today you would earn a total of 1,746 from holding Nuveen Santa Barbara or generate 35.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
Nuveen Louisiana Municipal vs. Nuveen Santa Barbara
Performance |
| Timeline |
| Nuveen Louisiana Mun |
| Nuveen Santa Barbara |
Nuveen Louisiana and Nuveen Santa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Louisiana and Nuveen Santa
The main advantage of trading using opposite Nuveen Louisiana and Nuveen Santa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Louisiana position performs unexpectedly, Nuveen Santa 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 Santa will offset losses from the drop in Nuveen Santa's long position.| Nuveen Louisiana vs. Franklin Federal Limited Term | Nuveen Louisiana vs. The Short Term | Nuveen Louisiana vs. Aqr Sustainable Long Short | Nuveen Louisiana vs. Siit Ultra Short |
| Nuveen Santa vs. Nuveen Small Cap | Nuveen Santa vs. Nuveen Real Estate | Nuveen Santa vs. Nuveen Real Estate | Nuveen Santa vs. Nuveen Preferred Securities |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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