Correlation Between Nuveen Dynamic and Federated Premier
Can any of the company-specific risk be diversified away by investing in both Nuveen Dynamic and Federated Premier 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 Dynamic and Federated Premier into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Dynamic Municipal and Federated Premier Municipal, you can compare the effects of market volatilities on Nuveen Dynamic and Federated Premier 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 Dynamic with a short position of Federated Premier. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Dynamic and Federated Premier.
Diversification Opportunities for Nuveen Dynamic and Federated Premier
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nuveen and Federated is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Dynamic Municipal and Federated Premier Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Premier and Nuveen Dynamic 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 Dynamic Municipal are associated (or correlated) with Federated Premier. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Premier has no effect on the direction of Nuveen Dynamic i.e., Nuveen Dynamic and Federated Premier go up and down completely randomly.
Pair Corralation between Nuveen Dynamic and Federated Premier
Given the investment horizon of 90 days Nuveen Dynamic Municipal is expected to generate 0.98 times more return on investment than Federated Premier. However, Nuveen Dynamic Municipal is 1.02 times less risky than Federated Premier. It trades about 0.11 of its potential returns per unit of risk. Federated Premier Municipal is currently generating about -0.03 per unit of risk. If you would invest 1,066 in Nuveen Dynamic Municipal on September 1, 2024 and sell it today you would earn a total of 15.00 from holding Nuveen Dynamic Municipal or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Dynamic Municipal vs. Federated Premier Municipal
Performance |
| Timeline |
| Nuveen Dynamic Municipal |
| Federated Premier |
Nuveen Dynamic and Federated Premier Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Dynamic and Federated Premier
The main advantage of trading using opposite Nuveen Dynamic and Federated Premier positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Dynamic position performs unexpectedly, Federated Premier 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 Federated Premier will offset losses from the drop in Federated Premier's long position.| Nuveen Dynamic vs. Blackrock Muni Intermediate | Nuveen Dynamic vs. Blackrock Muniyield Quality | Nuveen Dynamic vs. DWS Municipal Income | Nuveen Dynamic vs. Blackrock Muniyield Quality |
| Federated Premier vs. MFS Investment Grade | Federated Premier vs. Eaton Vance Municipal | Federated Premier vs. DTF Tax Free | Federated Premier vs. Aquagold International |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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