Correlation Between Nuveen California and First Northern
Can any of the company-specific risk be diversified away by investing in both Nuveen California and First Northern 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 First Northern 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 First Northern Community, you can compare the effects of market volatilities on Nuveen California and First Northern 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 First Northern. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen California and First Northern.
Diversification Opportunities for Nuveen California and First Northern
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nuveen and First is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen California Select and First Northern Community in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Northern Community 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 First Northern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Northern Community has no effect on the direction of Nuveen California i.e., Nuveen California and First Northern go up and down completely randomly.
Pair Corralation between Nuveen California and First Northern
Considering the 90-day investment horizon Nuveen California Select is expected to generate 3.41 times more return on investment than First Northern. However, Nuveen California is 3.41 times more volatile than First Northern Community. It trades about 0.04 of its potential returns per unit of risk. First Northern Community is currently generating about 0.14 per unit of risk. If you would invest 1,300 in Nuveen California Select on November 27, 2024 and sell it today you would earn a total of 5.00 from holding Nuveen California Select or generate 0.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen California Select vs. First Northern Community
Performance |
| Timeline |
| Nuveen California Select |
| First Northern Community |
Nuveen California and First Northern Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen California and First Northern
The main advantage of trading using opposite Nuveen California and First Northern positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen California position performs unexpectedly, First Northern 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 First Northern will offset losses from the drop in First Northern'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 |
| First Northern vs. Community West Bancshares | First Northern vs. Home Bancorp | First Northern vs. CB Financial Services | First Northern vs. Civista Bancshares |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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