Correlation Between Nuveen Minnesota and Prudential Jennison
Can any of the company-specific risk be diversified away by investing in both Nuveen Minnesota and Prudential Jennison 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 Prudential Jennison 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 Prudential Jennison Global, you can compare the effects of market volatilities on Nuveen Minnesota and Prudential Jennison 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 Prudential Jennison. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Minnesota and Prudential Jennison.
Diversification Opportunities for Nuveen Minnesota and Prudential Jennison
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nuveen and Prudential is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Minnesota Municipal and Prudential Jennison Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Jennison 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 Prudential Jennison. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Jennison has no effect on the direction of Nuveen Minnesota i.e., Nuveen Minnesota and Prudential Jennison go up and down completely randomly.
Pair Corralation between Nuveen Minnesota and Prudential Jennison
Assuming the 90 days horizon Nuveen Minnesota is expected to generate 6.88 times less return on investment than Prudential Jennison. But when comparing it to its historical volatility, Nuveen Minnesota Municipal is 4.68 times less risky than Prudential Jennison. It trades about 0.07 of its potential returns per unit of risk. Prudential Jennison Global is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,941 in Prudential Jennison Global on August 26, 2024 and sell it today you would earn a total of 1,933 from holding Prudential Jennison Global or generate 65.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Minnesota Municipal vs. Prudential Jennison Global
Performance |
| Timeline |
| Nuveen Minnesota Mun |
| Prudential Jennison |
Nuveen Minnesota and Prudential Jennison Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Minnesota and Prudential Jennison
The main advantage of trading using opposite Nuveen Minnesota and Prudential Jennison positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Minnesota position performs unexpectedly, Prudential Jennison 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 Prudential Jennison will offset losses from the drop in Prudential Jennison's long position.| Nuveen Minnesota vs. Legg Mason Bw | Nuveen Minnesota vs. Pace Large Growth | Nuveen Minnesota vs. Nuveen Winslow Large Cap | Nuveen Minnesota vs. William Blair Large |
| Prudential Jennison vs. Nuveen Minnesota Municipal | Prudential Jennison vs. T Rowe Price | Prudential Jennison vs. Artisan High Income | Prudential Jennison vs. T Rowe Price |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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