Correlation Between Nuveen New and Salient International
Can any of the company-specific risk be diversified away by investing in both Nuveen New and Salient International 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 New and Salient International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen New Jersey and Salient International Real, you can compare the effects of market volatilities on Nuveen New and Salient International 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 New with a short position of Salient International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen New and Salient International.
Diversification Opportunities for Nuveen New and Salient International
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nuveen and Salient is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen New Jersey and Salient International Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salient International and Nuveen New 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 New Jersey are associated (or correlated) with Salient International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salient International has no effect on the direction of Nuveen New i.e., Nuveen New and Salient International go up and down completely randomly.
Pair Corralation between Nuveen New and Salient International
Considering the 90-day investment horizon Nuveen New is expected to generate 1.11 times less return on investment than Salient International. But when comparing it to its historical volatility, Nuveen New Jersey is 1.72 times less risky than Salient International. It trades about 0.07 of its potential returns per unit of risk. Salient International Real is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,129 in Salient International Real on August 26, 2024 and sell it today you would earn a total of 173.00 from holding Salient International Real or generate 15.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen New Jersey vs. Salient International Real
Performance |
| Timeline |
| Nuveen New Jersey |
| Salient International |
Nuveen New and Salient International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen New and Salient International
The main advantage of trading using opposite Nuveen New and Salient International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen New position performs unexpectedly, Salient International 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 Salient International will offset losses from the drop in Salient International's long position.| Nuveen New vs. Munivest Fund | Nuveen New vs. Blackrock Muni Intermediate | Nuveen New vs. Blackrock Muniyield Quality | Nuveen New vs. Blackrock Muniyield Quality |
| Salient International vs. Salient Tactical Plus | Salient International vs. Salient Tactical Plus | Salient International vs. Salient Tactical Growth | Salient International vs. Salient Tactical Growth |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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