Correlation Between Nuveen Municipalome and Templeton Emerging
Can any of the company-specific risk be diversified away by investing in both Nuveen Municipalome and Templeton Emerging 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 Municipalome and Templeton Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Municipalome and Templeton Emerging Markets, you can compare the effects of market volatilities on Nuveen Municipalome and Templeton Emerging 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 Municipalome with a short position of Templeton Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Municipalome and Templeton Emerging.
Diversification Opportunities for Nuveen Municipalome and Templeton Emerging
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nuveen and Templeton is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Municipalome and Templeton Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Emerging and Nuveen Municipalome 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 Municipalome are associated (or correlated) with Templeton Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Emerging has no effect on the direction of Nuveen Municipalome i.e., Nuveen Municipalome and Templeton Emerging go up and down completely randomly.
Pair Corralation between Nuveen Municipalome and Templeton Emerging
Considering the 90-day investment horizon Nuveen Municipalome is expected to generate 1.93 times less return on investment than Templeton Emerging. But when comparing it to its historical volatility, Nuveen Municipalome is 1.33 times less risky than Templeton Emerging. It trades about 0.03 of its potential returns per unit of risk. Templeton Emerging Markets is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 412.00 in Templeton Emerging Markets on August 24, 2024 and sell it today you would earn a total of 120.00 from holding Templeton Emerging Markets or generate 29.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Municipalome vs. Templeton Emerging Markets
Performance |
| Timeline |
| Nuveen Municipalome |
| Templeton Emerging |
Nuveen Municipalome and Templeton Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Municipalome and Templeton Emerging
The main advantage of trading using opposite Nuveen Municipalome and Templeton Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Municipalome position performs unexpectedly, Templeton Emerging 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 Templeton Emerging will offset losses from the drop in Templeton Emerging's long position.| Nuveen Municipalome vs. Platinum Asia Investments | Nuveen Municipalome vs. Eaton Vance New | Nuveen Municipalome vs. Nuveen New York | Nuveen Municipalome vs. Nuveen Amt Free Municipal |
| Templeton Emerging vs. MFS Investment Grade | Templeton Emerging vs. Eaton Vance National | Templeton Emerging vs. Blackrock Muniyield Quality | Templeton Emerging vs. Munivest Fund |
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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