Correlation Between Nuveen New and Nuveen Municipal
Can any of the company-specific risk be diversified away by investing in both Nuveen New and Nuveen Municipal 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 Nuveen Municipal 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 Nuveen Municipal High, you can compare the effects of market volatilities on Nuveen New and Nuveen Municipal 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 Nuveen Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen New and Nuveen Municipal.
Diversification Opportunities for Nuveen New and Nuveen Municipal
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nuveen and Nuveen is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen New Jersey and Nuveen Municipal High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Municipal High 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 Nuveen Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Municipal High has no effect on the direction of Nuveen New i.e., Nuveen New and Nuveen Municipal go up and down completely randomly.
Pair Corralation between Nuveen New and Nuveen Municipal
Considering the 90-day investment horizon Nuveen New is expected to generate 3.96 times less return on investment than Nuveen Municipal. In addition to that, Nuveen New is 1.1 times more volatile than Nuveen Municipal High. It trades about 0.06 of its total potential returns per unit of risk. Nuveen Municipal High is currently generating about 0.26 per unit of volatility. If you would invest 1,088 in Nuveen Municipal High on November 3, 2024 and sell it today you would earn a total of 34.00 from holding Nuveen Municipal High or generate 3.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen New Jersey vs. Nuveen Municipal High
Performance |
| Timeline |
| Nuveen New Jersey |
| Nuveen Municipal High |
Nuveen New and Nuveen Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen New and Nuveen Municipal
The main advantage of trading using opposite Nuveen New and Nuveen Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen New position performs unexpectedly, Nuveen Municipal 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 Municipal will offset losses from the drop in Nuveen Municipal'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 |
| Nuveen Municipal vs. Nuveen Minnesota Municipal | Nuveen Municipal vs. Nuveen Symphony Floating | Nuveen Municipal vs. Nuveen Dow 30 | Nuveen Municipal vs. Nuveen Symphony Floating |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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