Correlation Between Nuveen California and Nuveen New
Can any of the company-specific risk be diversified away by investing in both Nuveen California and Nuveen New 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 Nuveen New 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 Nuveen New York, you can compare the effects of market volatilities on Nuveen California and Nuveen New 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 Nuveen New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen California and Nuveen New.
Diversification Opportunities for Nuveen California and Nuveen New
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nuveen and Nuveen is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen California Select and Nuveen New York in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen New York 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 Nuveen New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen New York has no effect on the direction of Nuveen California i.e., Nuveen California and Nuveen New go up and down completely randomly.
Pair Corralation between Nuveen California and Nuveen New
Considering the 90-day investment horizon Nuveen California Select is expected to generate 1.89 times more return on investment than Nuveen New. However, Nuveen California is 1.89 times more volatile than Nuveen New York. It trades about 0.08 of its potential returns per unit of risk. Nuveen New York is currently generating about 0.1 per unit of risk. If you would invest 1,273 in Nuveen California Select on August 31, 2024 and sell it today you would earn a total of 87.00 from holding Nuveen California Select or generate 6.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen California Select vs. Nuveen New York
Performance |
| Timeline |
| Nuveen California Select |
| Nuveen New York |
Nuveen California and Nuveen New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen California and Nuveen New
The main advantage of trading using opposite Nuveen California and Nuveen New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen California position performs unexpectedly, Nuveen New 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 Nuveen New will offset losses from the drop in Nuveen New'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 |
| Nuveen New vs. MFS Investment Grade | Nuveen New vs. Eaton Vance Municipal | Nuveen New vs. DTF Tax Free | Nuveen New vs. HUMANA 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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