Correlation Between Nuveen California and BBX Capital
Can any of the company-specific risk be diversified away by investing in both Nuveen California and BBX Capital 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 California and BBX Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen California Select and BBX Capital, you can compare the effects of market volatilities on Nuveen California and BBX Capital 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 California with a short position of BBX Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen California and BBX Capital.
Diversification Opportunities for Nuveen California and BBX Capital
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nuveen and BBX is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen California Select and BBX Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBX Capital and Nuveen California 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 California Select are associated (or correlated) with BBX Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBX Capital has no effect on the direction of Nuveen California i.e., Nuveen California and BBX Capital go up and down completely randomly.
Pair Corralation between Nuveen California and BBX Capital
Considering the 90-day investment horizon Nuveen California Select is expected to generate 0.69 times more return on investment than BBX Capital. However, Nuveen California Select is 1.45 times less risky than BBX Capital. It trades about 0.09 of its potential returns per unit of risk. BBX Capital is currently generating about -0.1 per unit of risk. If you would invest 1,256 in Nuveen California Select on August 28, 2024 and sell it today you would earn a total of 86.00 from holding Nuveen California Select or generate 6.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen California Select vs. BBX Capital
Performance |
| Timeline |
| Nuveen California Select |
| BBX Capital |
Nuveen California and BBX Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen California and BBX Capital
The main advantage of trading using opposite Nuveen California and BBX Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen California position performs unexpectedly, BBX Capital 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 BBX Capital will offset losses from the drop in BBX Capital's long position.| Nuveen California vs. Eaton Vance National | Nuveen California vs. Invesco High Income | Nuveen California vs. Blackrock Muniholdings Ny | Nuveen California vs. MFS Investment Grade |
| BBX Capital vs. Ameritrans Capital Corp | BBX Capital vs. Bounce Mobile Systems | BBX Capital vs. Elysee Development Corp | BBX Capital vs. AGF Management Limited |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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