Correlation Between Nuveen Strategic and College Retirement
Can any of the company-specific risk be diversified away by investing in both Nuveen Strategic and College Retirement 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 College Retirement 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 College Retirement Equities, you can compare the effects of market volatilities on Nuveen Strategic and College Retirement 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 College Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Strategic and College Retirement.
Diversification Opportunities for Nuveen Strategic and College Retirement
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nuveen and College is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Strategic Municipal and College Retirement Equities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on College Retirement 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 College Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of College Retirement has no effect on the direction of Nuveen Strategic i.e., Nuveen Strategic and College Retirement go up and down completely randomly.
Pair Corralation between Nuveen Strategic and College Retirement
Assuming the 90 days horizon Nuveen Strategic is expected to generate 21.16 times less return on investment than College Retirement. But when comparing it to its historical volatility, Nuveen Strategic Municipal is 3.69 times less risky than College Retirement. It trades about 0.01 of its potential returns per unit of risk. College Retirement Equities is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 32,793 in College Retirement Equities on October 18, 2024 and sell it today you would earn a total of 1,497 from holding College Retirement Equities or generate 4.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Strategic Municipal vs. College Retirement Equities
Performance |
| Timeline |
| Nuveen Strategic Mun |
| College Retirement |
Nuveen Strategic and College Retirement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Strategic and College Retirement
The main advantage of trading using opposite Nuveen Strategic and College Retirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Strategic position performs unexpectedly, College Retirement 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 College Retirement will offset losses from the drop in College Retirement's long position.| Nuveen Strategic vs. Blackrock Health Sciences | Nuveen Strategic vs. Vanguard Health Care | Nuveen Strategic vs. Live Oak Health | Nuveen Strategic vs. Invesco Global Health |
| College Retirement vs. Multisector Bond Sma | College Retirement vs. Leader Short Term Bond | College Retirement vs. Nuveen Strategic Municipal | College Retirement vs. Maryland Tax Free Bond |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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