Correlation Between Nuveen California and Strats SM
Can any of the company-specific risk be diversified away by investing in both Nuveen California and Strats SM 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 Strats SM 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 Strats SM Trust, you can compare the effects of market volatilities on Nuveen California and Strats SM 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 Strats SM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen California and Strats SM.
Diversification Opportunities for Nuveen California and Strats SM
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nuveen and Strats is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen California Select and Strats SM Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strats SM Trust 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 Strats SM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strats SM Trust has no effect on the direction of Nuveen California i.e., Nuveen California and Strats SM go up and down completely randomly.
Pair Corralation between Nuveen California and Strats SM
Considering the 90-day investment horizon Nuveen California Select is expected to generate 1.53 times more return on investment than Strats SM. However, Nuveen California is 1.53 times more volatile than Strats SM Trust. It trades about 0.21 of its potential returns per unit of risk. Strats SM Trust is currently generating about 0.0 per unit of risk. If you would invest 1,297 in Nuveen California Select on November 4, 2024 and sell it today you would earn a total of 20.00 from holding Nuveen California Select or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Nuveen California Select vs. Strats SM Trust
Performance |
| Timeline |
| Nuveen California Select |
| Strats SM Trust |
Nuveen California and Strats SM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen California and Strats SM
The main advantage of trading using opposite Nuveen California and Strats SM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen California position performs unexpectedly, Strats SM 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 Strats SM will offset losses from the drop in Strats SM'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 |
| Strats SM vs. STRATS SM Trust | Strats SM vs. SYNTHETIC FIXED INCOME | Strats SM vs. Strats SM Trust | Strats SM vs. STRATSSM Certificates series |
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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