Correlation Between Nuveen California and Century Financial
Can any of the company-specific risk be diversified away by investing in both Nuveen California and Century Financial 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 Century Financial 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 Century Financial Corp, you can compare the effects of market volatilities on Nuveen California and Century Financial 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 Century Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen California and Century Financial.
Diversification Opportunities for Nuveen California and Century Financial
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nuveen and Century is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen California Select and Century Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Financial Corp 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 Century Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Financial Corp has no effect on the direction of Nuveen California i.e., Nuveen California and Century Financial go up and down completely randomly.
Pair Corralation between Nuveen California and Century Financial
Considering the 90-day investment horizon Nuveen California is expected to generate 18.19 times less return on investment than Century Financial. But when comparing it to its historical volatility, Nuveen California Select is 2.58 times less risky than Century Financial. It trades about 0.02 of its potential returns per unit of risk. Century Financial Corp is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,650 in Century Financial Corp on November 27, 2024 and sell it today you would earn a total of 1,575 from holding Century Financial Corp or generate 59.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 49.29% |
| Values | Daily Returns |
Nuveen California Select vs. Century Financial Corp
Performance |
| Timeline |
| Nuveen California Select |
| Century Financial Corp |
Nuveen California and Century Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen California and Century Financial
The main advantage of trading using opposite Nuveen California and Century Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen California position performs unexpectedly, Century Financial 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 Century Financial will offset losses from the drop in Century Financial's long position.| Nuveen California vs. Eaton Vance National | Nuveen California vs. Blackrock Muniholdings Ny | Nuveen California vs. MFS Investment Grade | Nuveen California vs. Federated Premier Municipal |
| Century Financial vs. Eastern Michigan Financial | Century Financial vs. Grand River Commerce | Century Financial vs. Bank of Botetourt | Century Financial vs. FNB Inc |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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