Correlation Between Nuveen Strategic and Invesco Energy
Can any of the company-specific risk be diversified away by investing in both Nuveen Strategic and Invesco Energy 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 Strategic and Invesco Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Strategic Municipal and Invesco Energy Fund, you can compare the effects of market volatilities on Nuveen Strategic and Invesco Energy 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 Strategic with a short position of Invesco Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Strategic and Invesco Energy.
Diversification Opportunities for Nuveen Strategic and Invesco Energy
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nuveen and Invesco is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Strategic Municipal and Invesco Energy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Energy and Nuveen Strategic 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 Strategic Municipal are associated (or correlated) with Invesco Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Energy has no effect on the direction of Nuveen Strategic i.e., Nuveen Strategic and Invesco Energy go up and down completely randomly.
Pair Corralation between Nuveen Strategic and Invesco Energy
Assuming the 90 days horizon Nuveen Strategic Municipal is expected to generate 0.29 times more return on investment than Invesco Energy. However, Nuveen Strategic Municipal is 3.41 times less risky than Invesco Energy. It trades about -0.04 of its potential returns per unit of risk. Invesco Energy Fund is currently generating about -0.04 per unit of risk. If you would invest 1,002 in Nuveen Strategic Municipal on October 14, 2024 and sell it today you would lose (8.00) from holding Nuveen Strategic Municipal or give up 0.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Strategic Municipal vs. Invesco Energy Fund
Performance |
| Timeline |
| Nuveen Strategic Mun |
| Invesco Energy |
Nuveen Strategic and Invesco Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Strategic and Invesco Energy
The main advantage of trading using opposite Nuveen Strategic and Invesco Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Strategic position performs unexpectedly, Invesco Energy 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 Invesco Energy will offset losses from the drop in Invesco Energy's long position.| Nuveen Strategic vs. Nuveen Small Cap | Nuveen Strategic vs. Nuveen Real Estate | Nuveen Strategic vs. Nuveen Real Estate | Nuveen Strategic vs. Nuveen Preferred Securities |
| Invesco Energy vs. T Rowe Price | Invesco Energy vs. Bbh Intermediate Municipal | Invesco Energy vs. Artisan High Income | Invesco Energy vs. Nuveen Strategic Municipal |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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