Correlation Between Nuveen Minnesota and New Perspective
Can any of the company-specific risk be diversified away by investing in both Nuveen Minnesota and New Perspective 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 New Perspective 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 New Perspective Fund, you can compare the effects of market volatilities on Nuveen Minnesota and New Perspective 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 New Perspective. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Minnesota and New Perspective.
Diversification Opportunities for Nuveen Minnesota and New Perspective
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nuveen and New is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Minnesota Municipal and New Perspective Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Perspective 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 New Perspective. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Perspective has no effect on the direction of Nuveen Minnesota i.e., Nuveen Minnesota and New Perspective go up and down completely randomly.
Pair Corralation between Nuveen Minnesota and New Perspective
Assuming the 90 days horizon Nuveen Minnesota is expected to generate 2.2 times less return on investment than New Perspective. But when comparing it to its historical volatility, Nuveen Minnesota Municipal is 3.98 times less risky than New Perspective. It trades about 0.42 of its potential returns per unit of risk. New Perspective Fund is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 6,491 in New Perspective Fund on September 13, 2024 and sell it today you would earn a total of 185.00 from holding New Perspective Fund or generate 2.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Minnesota Municipal vs. New Perspective Fund
Performance |
| Timeline |
| Nuveen Minnesota Mun |
| New Perspective |
Nuveen Minnesota and New Perspective Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Minnesota and New Perspective
The main advantage of trading using opposite Nuveen Minnesota and New Perspective positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Minnesota position performs unexpectedly, New Perspective 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 New Perspective will offset losses from the drop in New Perspective's long position.| Nuveen Minnesota vs. Great West Goldman Sachs | Nuveen Minnesota vs. Goldman Sachs Clean | Nuveen Minnesota vs. Europac Gold Fund | Nuveen Minnesota vs. Invesco Gold Special |
| New Perspective vs. Schwab Treasury Inflation | New Perspective vs. Fidelity Sai Inflationfocused | New Perspective vs. Ab Bond Inflation | New Perspective vs. Blackrock Inflation Protected |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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