Correlation Between Nuveen Strategic and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Nuveen Strategic and Old Westbury 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 Old Westbury 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 Old Westbury Municipal, you can compare the effects of market volatilities on Nuveen Strategic and Old Westbury 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 Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Strategic and Old Westbury.
Diversification Opportunities for Nuveen Strategic and Old Westbury
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nuveen and Old is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Strategic Municipal and Old Westbury Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Municipal 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 Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury Municipal has no effect on the direction of Nuveen Strategic i.e., Nuveen Strategic and Old Westbury go up and down completely randomly.
Pair Corralation between Nuveen Strategic and Old Westbury
Assuming the 90 days horizon Nuveen Strategic Municipal is expected to generate 1.43 times more return on investment than Old Westbury. However, Nuveen Strategic is 1.43 times more volatile than Old Westbury Municipal. It trades about 0.11 of its potential returns per unit of risk. Old Westbury Municipal is currently generating about 0.04 per unit of risk. If you would invest 941.00 in Nuveen Strategic Municipal on November 3, 2024 and sell it today you would earn a total of 58.00 from holding Nuveen Strategic Municipal or generate 6.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Strategic Municipal vs. Old Westbury Municipal
Performance |
| Timeline |
| Nuveen Strategic Mun |
| Old Westbury Municipal |
Nuveen Strategic and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Strategic and Old Westbury
The main advantage of trading using opposite Nuveen Strategic and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Strategic position performs unexpectedly, Old Westbury 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 Old Westbury will offset losses from the drop in Old Westbury's long position.| Nuveen Strategic vs. Rbc Bluebay Emerging | Nuveen Strategic vs. Versatile Bond Portfolio | Nuveen Strategic vs. Barings High Yield | Nuveen Strategic vs. Baird Quality Intermediate |
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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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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