Correlation Between Western Asset and Nuveen Massachusetts
Can any of the company-specific risk be diversified away by investing in both Western Asset and Nuveen Massachusetts 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 Western Asset and Nuveen Massachusetts into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Municipal and Nuveen Massachusetts Quality, you can compare the effects of market volatilities on Western Asset and Nuveen Massachusetts 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 Western Asset with a short position of Nuveen Massachusetts. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Nuveen Massachusetts.
Diversification Opportunities for Western Asset and Nuveen Massachusetts
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Western and Nuveen is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Municipal and Nuveen Massachusetts Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Massachusetts and Western Asset 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 Western Asset Municipal are associated (or correlated) with Nuveen Massachusetts. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Massachusetts has no effect on the direction of Western Asset i.e., Western Asset and Nuveen Massachusetts go up and down completely randomly.
Pair Corralation between Western Asset and Nuveen Massachusetts
Considering the 90-day investment horizon Western Asset Municipal is expected to generate 0.77 times more return on investment than Nuveen Massachusetts. However, Western Asset Municipal is 1.3 times less risky than Nuveen Massachusetts. It trades about 0.26 of its potential returns per unit of risk. Nuveen Massachusetts Quality is currently generating about 0.1 per unit of risk. If you would invest 691.00 in Western Asset Municipal on August 31, 2024 and sell it today you would earn a total of 25.00 from holding Western Asset Municipal or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Municipal vs. Nuveen Massachusetts Quality
Performance |
| Timeline |
| Western Asset Municipal |
| Nuveen Massachusetts |
Western Asset and Nuveen Massachusetts Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Nuveen Massachusetts
The main advantage of trading using opposite Western Asset and Nuveen Massachusetts positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Nuveen Massachusetts 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 Massachusetts will offset losses from the drop in Nuveen Massachusetts' long position.| Western Asset vs. Western Asset Managed | Western Asset vs. Blackrock Muniholdings Quality | Western Asset vs. DTF Tax Free | Western Asset vs. John Hancock Income |
| Nuveen Massachusetts vs. Eaton Vance National | Nuveen Massachusetts vs. Blackrock Enhanced Government | Nuveen Massachusetts vs. The Gabelli Utility | Nuveen Massachusetts vs. Nuveen California Municipal |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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