Correlation Between Nuveen Minnesota and Payden Strategic
Can any of the company-specific risk be diversified away by investing in both Nuveen Minnesota and Payden Strategic 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 Payden Strategic 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 Payden Strategic Income, you can compare the effects of market volatilities on Nuveen Minnesota and Payden Strategic 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 Payden Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Minnesota and Payden Strategic.
Diversification Opportunities for Nuveen Minnesota and Payden Strategic
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nuveen and Payden is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Minnesota Municipal and Payden Strategic Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Strategic Income 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 Payden Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Strategic Income has no effect on the direction of Nuveen Minnesota i.e., Nuveen Minnesota and Payden Strategic go up and down completely randomly.
Pair Corralation between Nuveen Minnesota and Payden Strategic
Assuming the 90 days horizon Nuveen Minnesota is expected to generate 1.59 times less return on investment than Payden Strategic. In addition to that, Nuveen Minnesota is 1.68 times more volatile than Payden Strategic Income. It trades about 0.14 of its total potential returns per unit of risk. Payden Strategic Income is currently generating about 0.38 per unit of volatility. If you would invest 958.00 in Payden Strategic Income on November 27, 2024 and sell it today you would earn a total of 9.00 from holding Payden Strategic Income or generate 0.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Nuveen Minnesota Municipal vs. Payden Strategic Income
Performance |
| Timeline |
| Nuveen Minnesota Mun |
| Payden Strategic Income |
Nuveen Minnesota and Payden Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Minnesota and Payden Strategic
The main advantage of trading using opposite Nuveen Minnesota and Payden Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Minnesota position performs unexpectedly, Payden Strategic 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 Payden Strategic will offset losses from the drop in Payden Strategic's long position.| Nuveen Minnesota vs. Vanguard Growth Index | Nuveen Minnesota vs. Arrow Managed Futures | Nuveen Minnesota vs. Guidemark E Fixed | Nuveen Minnesota vs. Ft 7934 Corporate |
| Payden Strategic vs. Touchstone Ultra Short | Payden Strategic vs. Barings Active Short | Payden Strategic vs. Buffalo High Yield | Payden Strategic 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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