Correlation Between Nuveen Municipal and Nuveen Amt
Can any of the company-specific risk be diversified away by investing in both Nuveen Municipal and Nuveen Amt 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 Municipal and Nuveen Amt into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Municipal Credit and Nuveen Amt Free, you can compare the effects of market volatilities on Nuveen Municipal and Nuveen Amt 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 Municipal with a short position of Nuveen Amt. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Municipal and Nuveen Amt.
Diversification Opportunities for Nuveen Municipal and Nuveen Amt
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nuveen and Nuveen is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Municipal Credit and Nuveen Amt Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Amt Free and Nuveen Municipal 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 Municipal Credit are associated (or correlated) with Nuveen Amt. 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 Nuveen Municipal i.e., Nuveen Municipal and Nuveen Amt go up and down completely randomly.
Pair Corralation between Nuveen Municipal and Nuveen Amt
Given the investment horizon of 90 days Nuveen Municipal is expected to generate 6.05 times less return on investment than Nuveen Amt. But when comparing it to its historical volatility, Nuveen Municipal Credit is 1.31 times less risky than Nuveen Amt. It trades about 0.03 of its potential returns per unit of risk. Nuveen Amt Free is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,251 in Nuveen Amt Free on August 27, 2024 and sell it today you would earn a total of 38.00 from holding Nuveen Amt Free or generate 3.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Municipal Credit vs. Nuveen Amt Free
Performance |
| Timeline |
| Nuveen Municipal Credit |
| Nuveen Amt Free |
Nuveen Municipal and Nuveen Amt Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Municipal and Nuveen Amt
The main advantage of trading using opposite Nuveen Municipal and Nuveen Amt positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Municipal position performs unexpectedly, Nuveen Amt 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 will offset losses from the drop in Nuveen Amt's long position.| Nuveen Municipal vs. Munivest Fund | Nuveen Municipal vs. Blackrock Muniholdings Quality | Nuveen Municipal vs. DWS Municipal Income | Nuveen Municipal vs. Blackrock Muniholdings Closed |
| Nuveen Amt vs. Nuveen Amt Free Municipal | Nuveen Amt vs. Nuveen Dividend Advantage | Nuveen Amt vs. Nuveen Municipal High | Nuveen Amt vs. Nuveen Municipal Value |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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