Correlation Between Nuveen Minnesota and Alliancebernstein
Can any of the company-specific risk be diversified away by investing in both Nuveen Minnesota and Alliancebernstein 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 Minnesota and Alliancebernstein into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Minnesota Municipal and Alliancebernstein National Municipal, you can compare the effects of market volatilities on Nuveen Minnesota and Alliancebernstein 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 Minnesota with a short position of Alliancebernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Minnesota and Alliancebernstein.
Diversification Opportunities for Nuveen Minnesota and Alliancebernstein
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nuveen and Alliancebernstein is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Minnesota Municipal and Alliancebernstein National Mun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein and Nuveen Minnesota 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 Minnesota Municipal are associated (or correlated) with Alliancebernstein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliancebernstein has no effect on the direction of Nuveen Minnesota i.e., Nuveen Minnesota and Alliancebernstein go up and down completely randomly.
Pair Corralation between Nuveen Minnesota and Alliancebernstein
Assuming the 90 days horizon Nuveen Minnesota is expected to generate 2.29 times less return on investment than Alliancebernstein. But when comparing it to its historical volatility, Nuveen Minnesota Municipal is 2.55 times less risky than Alliancebernstein. It trades about 0.19 of its potential returns per unit of risk. Alliancebernstein National Municipal is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 1,111 in Alliancebernstein National Municipal on August 30, 2024 and sell it today you would earn a total of 33.00 from holding Alliancebernstein National Municipal or generate 2.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Minnesota Municipal vs. Alliancebernstein National Mun
Performance |
| Timeline |
| Nuveen Minnesota Mun |
| Alliancebernstein |
Nuveen Minnesota and Alliancebernstein Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Minnesota and Alliancebernstein
The main advantage of trading using opposite Nuveen Minnesota and Alliancebernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Minnesota position performs unexpectedly, Alliancebernstein 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 Alliancebernstein will offset losses from the drop in Alliancebernstein's long position.| Nuveen Minnesota vs. Nuveen Small Cap | Nuveen Minnesota vs. Nuveen Real Estate | Nuveen Minnesota vs. Nuveen Real Estate | Nuveen Minnesota vs. Nuveen Preferred Securities |
| Alliancebernstein vs. Eaton Vance Short | Alliancebernstein vs. Allianzgi Diversified Income | Alliancebernstein vs. Ares Dynamic Credit | Alliancebernstein vs. DWS Municipal Income |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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