Correlation Between Nuveen New and Redwood Managed
Can any of the company-specific risk be diversified away by investing in both Nuveen New and Redwood Managed 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 Redwood Managed 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 Redwood Managed Municipal, you can compare the effects of market volatilities on Nuveen New and Redwood Managed 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 Redwood Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen New and Redwood Managed.
Diversification Opportunities for Nuveen New and Redwood Managed
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nuveen and Redwood is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen New Jersey and Redwood Managed Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Redwood Managed Municipal 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 Redwood Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Redwood Managed Municipal has no effect on the direction of Nuveen New i.e., Nuveen New and Redwood Managed go up and down completely randomly.
Pair Corralation between Nuveen New and Redwood Managed
Considering the 90-day investment horizon Nuveen New Jersey is expected to generate 2.85 times more return on investment than Redwood Managed. However, Nuveen New is 2.85 times more volatile than Redwood Managed Municipal. It trades about 0.18 of its potential returns per unit of risk. Redwood Managed Municipal is currently generating about 0.1 per unit of risk. If you would invest 1,123 in Nuveen New Jersey on September 1, 2024 and sell it today you would earn a total of 139.00 from holding Nuveen New Jersey or generate 12.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Nuveen New Jersey vs. Redwood Managed Municipal
Performance |
| Timeline |
| Nuveen New Jersey |
| Redwood Managed Municipal |
Nuveen New and Redwood Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen New and Redwood Managed
The main advantage of trading using opposite Nuveen New and Redwood Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen New position performs unexpectedly, Redwood Managed 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 Redwood Managed will offset losses from the drop in Redwood Managed'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 |
| Redwood Managed vs. Redwood Alphafactor Tactical | Redwood Managed vs. Redwood Systematic Macro | Redwood Managed vs. Neuberger Berman Genesis | Redwood Managed vs. Calamos Strategic Total |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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