Correlation Between SPDR Nuveen and Capital Group
Can any of the company-specific risk be diversified away by investing in both SPDR Nuveen and Capital Group 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 SPDR Nuveen and Capital Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Nuveen Municipal and Capital Group Fixed, you can compare the effects of market volatilities on SPDR Nuveen and Capital Group 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 SPDR Nuveen with a short position of Capital Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Nuveen and Capital Group.
Diversification Opportunities for SPDR Nuveen and Capital Group
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between SPDR and Capital is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Nuveen Municipal and Capital Group Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Group Fixed and SPDR Nuveen 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 SPDR Nuveen Municipal are associated (or correlated) with Capital Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Group Fixed has no effect on the direction of SPDR Nuveen i.e., SPDR Nuveen and Capital Group go up and down completely randomly.
Pair Corralation between SPDR Nuveen and Capital Group
Given the investment horizon of 90 days SPDR Nuveen Municipal is expected to generate 1.81 times more return on investment than Capital Group. However, SPDR Nuveen is 1.81 times more volatile than Capital Group Fixed. It trades about 0.23 of its potential returns per unit of risk. Capital Group Fixed is currently generating about 0.12 per unit of risk. If you would invest 2,749 in SPDR Nuveen Municipal on September 1, 2024 and sell it today you would earn a total of 43.00 from holding SPDR Nuveen Municipal or generate 1.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
SPDR Nuveen Municipal vs. Capital Group Fixed
Performance |
| Timeline |
| SPDR Nuveen Municipal |
| Capital Group Fixed |
SPDR Nuveen and Capital Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Nuveen and Capital Group
The main advantage of trading using opposite SPDR Nuveen and Capital Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Nuveen position performs unexpectedly, Capital Group 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 Capital Group will offset losses from the drop in Capital Group's long position.| SPDR Nuveen vs. Mountain Commerce Bancorp | SPDR Nuveen vs. Magyar Bancorp | SPDR Nuveen vs. Nortech Systems Incorporated |
| Capital Group vs. SSGA Active Trust | Capital Group vs. SPDR Nuveen Municipal | Capital Group vs. iShares Short Maturity | Capital Group vs. First Trust Flexible |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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