Correlation Between Nuveen Strategic and Target Retirement
Can any of the company-specific risk be diversified away by investing in both Nuveen Strategic and Target 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 Target 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 Target Retirement 2040, you can compare the effects of market volatilities on Nuveen Strategic and Target 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 Target Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Strategic and Target Retirement.
Diversification Opportunities for Nuveen Strategic and Target Retirement
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nuveen and Target is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Strategic Municipal and Target Retirement 2040 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Target Retirement 2040 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 Target Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Target Retirement 2040 has no effect on the direction of Nuveen Strategic i.e., Nuveen Strategic and Target Retirement go up and down completely randomly.
Pair Corralation between Nuveen Strategic and Target Retirement
Assuming the 90 days horizon Nuveen Strategic Municipal is expected to under-perform the Target Retirement. But the mutual fund apears to be less risky and, when comparing its historical volatility, Nuveen Strategic Municipal is 1.75 times less risky than Target Retirement. The mutual fund trades about -0.11 of its potential returns per unit of risk. The Target Retirement 2040 is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,293 in Target Retirement 2040 on October 19, 2024 and sell it today you would earn a total of 16.00 from holding Target Retirement 2040 or generate 1.24% 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. Target Retirement 2040
Performance |
| Timeline |
| Nuveen Strategic Mun |
| Target Retirement 2040 |
Nuveen Strategic and Target Retirement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Strategic and Target Retirement
The main advantage of trading using opposite Nuveen Strategic and Target Retirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Strategic position performs unexpectedly, Target 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 Target Retirement will offset losses from the drop in Target Retirement's long position.| Nuveen Strategic vs. Forum Real Estate | Nuveen Strategic vs. Real Estate Ultrasector | Nuveen Strategic vs. Redwood Real Estate | Nuveen Strategic vs. Rreef Property Trust |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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