Correlation Between Nuveen Massachusetts and State Street
Can any of the company-specific risk be diversified away by investing in both Nuveen Massachusetts and State Street 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 Massachusetts and State Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Massachusetts Quality and State Street Corp, you can compare the effects of market volatilities on Nuveen Massachusetts and State Street 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 Massachusetts with a short position of State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Massachusetts and State Street.
Diversification Opportunities for Nuveen Massachusetts and State Street
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nuveen and State is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Massachusetts Quality and State Street Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street Corp and Nuveen Massachusetts 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 Massachusetts Quality are associated (or correlated) with State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street Corp has no effect on the direction of Nuveen Massachusetts i.e., Nuveen Massachusetts and State Street go up and down completely randomly.
Pair Corralation between Nuveen Massachusetts and State Street
Considering the 90-day investment horizon Nuveen Massachusetts is expected to generate 3.37 times less return on investment than State Street. But when comparing it to its historical volatility, Nuveen Massachusetts Quality is 1.6 times less risky than State Street. It trades about 0.1 of its potential returns per unit of risk. State Street Corp is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 9,293 in State Street Corp on August 31, 2024 and sell it today you would earn a total of 586.00 from holding State Street Corp or generate 6.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Massachusetts Quality vs. State Street Corp
Performance |
| Timeline |
| Nuveen Massachusetts |
| State Street Corp |
Nuveen Massachusetts and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Massachusetts and State Street
The main advantage of trading using opposite Nuveen Massachusetts and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Massachusetts position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street's long position.| Nuveen Massachusetts vs. Eaton Vance National | Nuveen Massachusetts vs. Blackrock Enhanced Government | Nuveen Massachusetts vs. The Gabelli Utility | Nuveen Massachusetts vs. Nuveen California Municipal |
| State Street vs. Northern Trust | State Street vs. Franklin Resources | State Street vs. Invesco Plc | State Street vs. T Rowe Price |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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