Correlation Between Nuveen California and PGIM Short
Can any of the company-specific risk be diversified away by investing in both Nuveen California and PGIM Short 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 PGIM Short 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 PGIM Short Duration, you can compare the effects of market volatilities on Nuveen California and PGIM Short 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 PGIM Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen California and PGIM Short.
Diversification Opportunities for Nuveen California and PGIM Short
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nuveen and PGIM is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen California Select and PGIM Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGIM Short Duration 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 PGIM Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGIM Short Duration has no effect on the direction of Nuveen California i.e., Nuveen California and PGIM Short go up and down completely randomly.
Pair Corralation between Nuveen California and PGIM Short
Considering the 90-day investment horizon Nuveen California is expected to generate 3.66 times less return on investment than PGIM Short. In addition to that, Nuveen California is 1.37 times more volatile than PGIM Short Duration. It trades about 0.02 of its total potential returns per unit of risk. PGIM Short Duration is currently generating about 0.08 per unit of volatility. If you would invest 1,653 in PGIM Short Duration on September 1, 2024 and sell it today you would earn a total of 17.00 from holding PGIM Short Duration or generate 1.03% 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. PGIM Short Duration
Performance |
| Timeline |
| Nuveen California Select |
| PGIM Short Duration |
Nuveen California and PGIM Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen California and PGIM Short
The main advantage of trading using opposite Nuveen California and PGIM Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen California position performs unexpectedly, PGIM Short 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 PGIM Short will offset losses from the drop in PGIM Short'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 |
| PGIM Short vs. John Hancock Income | PGIM Short vs. MFS High Income | PGIM Short vs. MFS Investment Grade | PGIM Short vs. Blackrock Muniholdings Closed |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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