Correlation Between Nuveen California and Pacific Financial
Can any of the company-specific risk be diversified away by investing in both Nuveen California and Pacific 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 Pacific 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 Pacific Financial Corp, you can compare the effects of market volatilities on Nuveen California and Pacific 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 Pacific Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen California and Pacific Financial.
Diversification Opportunities for Nuveen California and Pacific Financial
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nuveen and Pacific is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen California Select and Pacific Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pacific 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 Pacific Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pacific Financial Corp has no effect on the direction of Nuveen California i.e., Nuveen California and Pacific Financial go up and down completely randomly.
Pair Corralation between Nuveen California and Pacific Financial
Considering the 90-day investment horizon Nuveen California is expected to generate 145.59 times less return on investment than Pacific Financial. But when comparing it to its historical volatility, Nuveen California Select is 1.56 times less risky than Pacific Financial. It trades about 0.0 of its potential returns per unit of risk. Pacific Financial Corp is currently generating about 0.36 of returns per unit of risk over similar time horizon. If you would invest 1,181 in Pacific Financial Corp on September 2, 2024 and sell it today you would earn a total of 119.00 from holding Pacific Financial Corp or generate 10.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen California Select vs. Pacific Financial Corp
Performance |
| Timeline |
| Nuveen California Select |
| Pacific Financial Corp |
Nuveen California and Pacific Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen California and Pacific Financial
The main advantage of trading using opposite Nuveen California and Pacific Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen California position performs unexpectedly, Pacific 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 Pacific Financial will offset losses from the drop in Pacific Financial'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 |
| Pacific Financial vs. Pioneer Bankcorp | Pacific Financial vs. Liberty Northwest Bancorp | Pacific Financial vs. First Community | Pacific Financial vs. Coeur dAlene Bancorp |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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