Correlation Between Nuveen California and Saba Capital
Can any of the company-specific risk be diversified away by investing in both Nuveen California and Saba Capital 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 Nuveen California and Saba Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen California Municipal and Saba Capital Income, you can compare the effects of market volatilities on Nuveen California and Saba Capital 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 Nuveen California with a short position of Saba Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen California and Saba Capital.
Diversification Opportunities for Nuveen California and Saba Capital
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nuveen and Saba is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen California Municipal and Saba Capital Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saba Capital Income and Nuveen California 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 Nuveen California Municipal are associated (or correlated) with Saba Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saba Capital Income has no effect on the direction of Nuveen California i.e., Nuveen California and Saba Capital go up and down completely randomly.
Pair Corralation between Nuveen California and Saba Capital
Considering the 90-day investment horizon Nuveen California is expected to generate 5.87 times less return on investment than Saba Capital. But when comparing it to its historical volatility, Nuveen California Municipal is 1.06 times less risky than Saba Capital. It trades about 0.01 of its potential returns per unit of risk. Saba Capital Income is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 623.00 in Saba Capital Income on November 2, 2024 and sell it today you would earn a total of 163.00 from holding Saba Capital Income or generate 26.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen California Municipal vs. Saba Capital Income
Performance |
| Timeline |
| Nuveen California |
| Saba Capital Income |
Nuveen California and Saba Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen California and Saba Capital
The main advantage of trading using opposite Nuveen California and Saba Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen California position performs unexpectedly, Saba Capital 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 Saba Capital will offset losses from the drop in Saba Capital's long position.| Nuveen California vs. Nuveen California Select | Nuveen California vs. Nuveen New York | Nuveen California vs. Nuveen California Dividend | Nuveen California vs. Nuveen California Amt |
| Saba Capital vs. Federated Premier Municipal | Saba Capital vs. Blackrock Muniyield | Saba Capital vs. Diamond Hill Investment | Saba Capital vs. NXG NextGen Infrastructure |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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