Correlation Between Lord Abbett and Nuveen Municipal
Can any of the company-specific risk be diversified away by investing in both Lord Abbett 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 Lord Abbett and Nuveen Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lord Abbett High and Nuveen Municipal High, you can compare the effects of market volatilities on Lord Abbett 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 Lord Abbett with a short position of Nuveen Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lord Abbett and Nuveen Municipal.
Diversification Opportunities for Lord Abbett and Nuveen Municipal
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lord and Nuveen is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Lord Abbett High and Nuveen Municipal High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Municipal High and Lord Abbett 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 Lord Abbett High 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 High has no effect on the direction of Lord Abbett i.e., Lord Abbett and Nuveen Municipal go up and down completely randomly.
Pair Corralation between Lord Abbett and Nuveen Municipal
Assuming the 90 days horizon Lord Abbett is expected to generate 3.86 times less return on investment than Nuveen Municipal. But when comparing it to its historical volatility, Lord Abbett High is 3.97 times less risky than Nuveen Municipal. It trades about 0.15 of its potential returns per unit of risk. Nuveen Municipal High is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,123 in Nuveen Municipal High on September 4, 2024 and sell it today you would earn a total of 20.00 from holding Nuveen Municipal High or generate 1.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lord Abbett High vs. Nuveen Municipal High
Performance |
| Timeline |
| Lord Abbett High |
| Nuveen Municipal High |
Lord Abbett and Nuveen Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lord Abbett and Nuveen Municipal
The main advantage of trading using opposite Lord Abbett and Nuveen Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lord Abbett 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.| Lord Abbett vs. Clearbridge Energy Mlp | Lord Abbett vs. World Energy Fund | Lord Abbett vs. Hennessy Bp Energy | Lord Abbett vs. Oil Gas Ultrasector |
| Nuveen Municipal vs. T Rowe Price | Nuveen Municipal vs. Artisan High Income | Nuveen Municipal vs. Ppm High Yield | Nuveen Municipal vs. Lord Abbett High |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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