Correlation Between NYSE Composite and Nuveen Municipal
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Nuveen Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Nuveen Municipal Credit, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Nuveen Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Nuveen Municipal.
Diversification Opportunities for NYSE Composite and Nuveen Municipal
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Nuveen is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Nuveen Municipal Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Municipal Credit and NYSE Composite 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 NYSE Composite 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 Credit has no effect on the direction of NYSE Composite i.e., NYSE Composite and Nuveen Municipal go up and down completely randomly.
Pair Corralation between NYSE Composite and Nuveen Municipal
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.88 times more return on investment than Nuveen Municipal. However, NYSE Composite is 1.13 times less risky than Nuveen Municipal. It trades about 0.13 of its potential returns per unit of risk. Nuveen Municipal Credit is currently generating about -0.04 per unit of risk. If you would invest 1,959,424 in NYSE Composite on August 24, 2024 and sell it today you would earn a total of 37,406 from holding NYSE Composite or generate 1.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Nuveen Municipal Credit
Performance |
| Timeline |
NYSE Composite and Nuveen Municipal Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Nuveen Municipal Credit
Pair trading matchups for Nuveen Municipal
Pair Trading with NYSE Composite and Nuveen Municipal
The main advantage of trading using opposite NYSE Composite and Nuveen Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Awilco Drilling PLC | NYSE Composite vs. AKITA Drilling | NYSE Composite vs. SunOpta | NYSE Composite vs. Delek Drilling |
| Nuveen Municipal vs. Munivest Fund | Nuveen Municipal vs. Blackrock Muniholdings Quality | Nuveen Municipal vs. DWS Municipal Income | Nuveen Municipal 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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