Correlation Between GM and Nuveen New
Can any of the company-specific risk be diversified away by investing in both GM and Nuveen New 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 GM and Nuveen New into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Nuveen New Jersey, you can compare the effects of market volatilities on GM and Nuveen New 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 GM with a short position of Nuveen New. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Nuveen New.
Diversification Opportunities for GM and Nuveen New
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GM and Nuveen is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Nuveen New Jersey in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen New Jersey and GM 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 General Motors are associated (or correlated) with Nuveen New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen New Jersey has no effect on the direction of GM i.e., GM and Nuveen New go up and down completely randomly.
Pair Corralation between GM and Nuveen New
Allowing for the 90-day total investment horizon General Motors is expected to under-perform the Nuveen New. In addition to that, GM is 12.33 times more volatile than Nuveen New Jersey. It trades about -0.09 of its total potential returns per unit of risk. Nuveen New Jersey is currently generating about 0.22 per unit of volatility. If you would invest 1,045 in Nuveen New Jersey on November 9, 2024 and sell it today you would earn a total of 11.00 from holding Nuveen New Jersey or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
General Motors vs. Nuveen New Jersey
Performance |
| Timeline |
| General Motors |
| Nuveen New Jersey |
GM and Nuveen New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Nuveen New
The main advantage of trading using opposite GM and Nuveen New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM position performs unexpectedly, Nuveen New 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 New will offset losses from the drop in Nuveen New's long position.The idea behind General Motors and Nuveen New Jersey pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Nuveen New vs. Nuveen Minnesota Municipal | Nuveen New vs. Nuveen Symphony Floating | Nuveen New vs. Nuveen Symphony Floating | Nuveen New vs. Nuveen Symphony Floating |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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