Correlation Between Western Asset and Nuveen Amt-free
Can any of the company-specific risk be diversified away by investing in both Western Asset and Nuveen Amt-free 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 Amt-free 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 Amt Free Municipal, you can compare the effects of market volatilities on Western Asset and Nuveen Amt-free 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 Amt-free. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Nuveen Amt-free.
Diversification Opportunities for Western Asset and Nuveen Amt-free
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Western and Nuveen is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Municipal and Nuveen Amt Free Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Amt Free 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 Amt-free. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Amt Free has no effect on the direction of Western Asset i.e., Western Asset and Nuveen Amt-free go up and down completely randomly.
Pair Corralation between Western Asset and Nuveen Amt-free
Considering the 90-day investment horizon Western Asset Municipal is expected to generate 1.0 times more return on investment than Nuveen Amt-free. However, Western Asset Municipal is 1.0 times less risky than Nuveen Amt-free. It trades about 0.0 of its potential returns per unit of risk. Nuveen Amt Free Municipal is currently generating about -0.05 per unit of risk. If you would invest 705.00 in Western Asset Municipal on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Western Asset Municipal or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Municipal vs. Nuveen Amt Free Municipal
Performance |
| Timeline |
| Western Asset Municipal |
| Nuveen Amt Free |
Western Asset and Nuveen Amt-free Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Nuveen Amt-free
The main advantage of trading using opposite Western Asset and Nuveen Amt-free positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Nuveen Amt-free 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 Amt-free will offset losses from the drop in Nuveen Amt-free's long position.| Western Asset vs. MFS Investment Grade | Western Asset vs. Eaton Vance National | Western Asset vs. Blackrock Muniyield Quality | Western Asset vs. DTF Tax Free |
| Nuveen Amt-free vs. Nuveen New York | Nuveen Amt-free vs. Eaton Vance New | Nuveen Amt-free vs. Pimco New York | Nuveen Amt-free vs. Nuveen Municipalome |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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