Correlation Between Kentucky Tax and Nuveen Municipal
Can any of the company-specific risk be diversified away by investing in both Kentucky Tax and Nuveen Municipal 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 Kentucky Tax and Nuveen Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kentucky Tax Free Short To Medium and Nuveen Municipal Credit, you can compare the effects of market volatilities on Kentucky Tax and Nuveen Municipal 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 Kentucky Tax with a short position of Nuveen Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kentucky Tax and Nuveen Municipal.
Diversification Opportunities for Kentucky Tax and Nuveen Municipal
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kentucky and Nuveen is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Kentucky Tax Free Short To Med and Nuveen Municipal Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Municipal Credit and Kentucky Tax 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 Kentucky Tax Free Short To Medium are associated (or correlated) with Nuveen Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Municipal Credit has no effect on the direction of Kentucky Tax i.e., Kentucky Tax and Nuveen Municipal go up and down completely randomly.
Pair Corralation between Kentucky Tax and Nuveen Municipal
Assuming the 90 days horizon Kentucky Tax is expected to generate 4.46 times less return on investment than Nuveen Municipal. But when comparing it to its historical volatility, Kentucky Tax Free Short To Medium is 3.36 times less risky than Nuveen Municipal. It trades about 0.4 of its potential returns per unit of risk. Nuveen Municipal Credit is currently generating about 0.53 of returns per unit of risk over similar time horizon. If you would invest 1,177 in Nuveen Municipal Credit on September 12, 2024 and sell it today you would earn a total of 31.00 from holding Nuveen Municipal Credit or generate 2.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kentucky Tax Free Short To Med vs. Nuveen Municipal Credit
Performance |
| Timeline |
| Kentucky Tax Free |
| Nuveen Municipal Credit |
Kentucky Tax and Nuveen Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kentucky Tax and Nuveen Municipal
The main advantage of trading using opposite Kentucky Tax and Nuveen Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kentucky Tax position performs unexpectedly, Nuveen Municipal 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 Municipal will offset losses from the drop in Nuveen Municipal's long position.| Kentucky Tax vs. SCOR PK | Kentucky Tax vs. Morningstar Unconstrained Allocation | Kentucky Tax vs. Thrivent High Yield | Kentucky Tax vs. Via Renewables |
| Nuveen Municipal vs. Dreyfus Short Intermediate | Nuveen Municipal vs. Touchstone Ultra Short | Nuveen Municipal vs. Boston Partners Longshort | Nuveen Municipal vs. Kentucky Tax Free Short To Medium |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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