Correlation Between DWS Municipal and Nuveen High
Can any of the company-specific risk be diversified away by investing in both DWS Municipal and Nuveen High 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 DWS Municipal and Nuveen High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DWS Municipal Income and Nuveen High Income, you can compare the effects of market volatilities on DWS Municipal and Nuveen High 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 DWS Municipal with a short position of Nuveen High. Check out your portfolio center. Please also check ongoing floating volatility patterns of DWS Municipal and Nuveen High.
Diversification Opportunities for DWS Municipal and Nuveen High
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DWS and Nuveen is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding DWS Municipal Income and Nuveen High Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen High Income and DWS Municipal 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 DWS Municipal Income are associated (or correlated) with Nuveen High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen High Income has no effect on the direction of DWS Municipal i.e., DWS Municipal and Nuveen High go up and down completely randomly.
Pair Corralation between DWS Municipal and Nuveen High
If you would invest 970.00 in DWS Municipal Income on September 1, 2024 and sell it today you would earn a total of 36.00 from holding DWS Municipal Income or generate 3.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
DWS Municipal Income vs. Nuveen High Income
Performance |
| Timeline |
| DWS Municipal Income |
| Nuveen High Income |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
DWS Municipal and Nuveen High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DWS Municipal and Nuveen High
The main advantage of trading using opposite DWS Municipal and Nuveen High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DWS Municipal position performs unexpectedly, Nuveen High 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 High will offset losses from the drop in Nuveen High's long position.| DWS Municipal vs. DTF Tax Free | DWS Municipal vs. Blackrock Muniyield Quality | DWS Municipal vs. Blackrock Muni Intermediate | DWS Municipal vs. Blackrock Muniholdings Quality |
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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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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