Correlation Between Nuveen Ohio and Franklin Ohio
Can any of the company-specific risk be diversified away by investing in both Nuveen Ohio and Franklin Ohio 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 Ohio and Franklin Ohio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Ohio Municipal and Franklin Ohio Tax Free, you can compare the effects of market volatilities on Nuveen Ohio and Franklin Ohio 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 Ohio with a short position of Franklin Ohio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Ohio and Franklin Ohio.
Diversification Opportunities for Nuveen Ohio and Franklin Ohio
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nuveen and Franklin is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Ohio Municipal and Franklin Ohio Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Franklin Ohio Tax and Nuveen Ohio 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 Ohio Municipal are associated (or correlated) with Franklin Ohio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Franklin Ohio Tax has no effect on the direction of Nuveen Ohio i.e., Nuveen Ohio and Franklin Ohio go up and down completely randomly.
Pair Corralation between Nuveen Ohio and Franklin Ohio
Assuming the 90 days horizon Nuveen Ohio is expected to generate 1.35 times less return on investment than Franklin Ohio. But when comparing it to its historical volatility, Nuveen Ohio Municipal is 1.04 times less risky than Franklin Ohio. It trades about 0.06 of its potential returns per unit of risk. Franklin Ohio Tax Free is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,083 in Franklin Ohio Tax Free on September 4, 2024 and sell it today you would earn a total of 80.00 from holding Franklin Ohio Tax Free or generate 7.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Nuveen Ohio Municipal vs. Franklin Ohio Tax Free
Performance |
| Timeline |
| Nuveen Ohio Municipal |
| Franklin Ohio Tax |
Nuveen Ohio and Franklin Ohio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Ohio and Franklin Ohio
The main advantage of trading using opposite Nuveen Ohio and Franklin Ohio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Ohio position performs unexpectedly, Franklin Ohio 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 Franklin Ohio will offset losses from the drop in Franklin Ohio's long position.| Nuveen Ohio vs. Nuveen Small Cap | Nuveen Ohio vs. Nuveen Real Estate | Nuveen Ohio vs. Nuveen Real Estate | Nuveen Ohio vs. Nuveen Preferred Securities |
| Franklin Ohio vs. Franklin Mutual Beacon | Franklin Ohio vs. Templeton Developing Markets | Franklin Ohio vs. Franklin Mutual Global | Franklin Ohio vs. Franklin Mutual Global |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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