Correlation Between Old Westbury and Nuveen Strategic
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Nuveen Strategic 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 Old Westbury and Nuveen Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Westbury Municipal and Nuveen Strategic Municipal, you can compare the effects of market volatilities on Old Westbury and Nuveen Strategic 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 Old Westbury with a short position of Nuveen Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Nuveen Strategic.
Diversification Opportunities for Old Westbury and Nuveen Strategic
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Old and Nuveen is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Municipal and Nuveen Strategic Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Strategic Mun and Old Westbury 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 Old Westbury Municipal are associated (or correlated) with Nuveen Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Strategic Mun has no effect on the direction of Old Westbury i.e., Old Westbury and Nuveen Strategic go up and down completely randomly.
Pair Corralation between Old Westbury and Nuveen Strategic
Assuming the 90 days horizon Old Westbury is expected to generate 4.22 times less return on investment than Nuveen Strategic. But when comparing it to its historical volatility, Old Westbury Municipal is 1.43 times less risky than Nuveen Strategic. It trades about 0.04 of its potential returns per unit of risk. Nuveen Strategic Municipal is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 941.00 in Nuveen Strategic Municipal on November 3, 2024 and sell it today you would earn a total of 58.00 from holding Nuveen Strategic Municipal or generate 6.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Westbury Municipal vs. Nuveen Strategic Municipal
Performance |
| Timeline |
| Old Westbury Municipal |
| Nuveen Strategic Mun |
Old Westbury and Nuveen Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Nuveen Strategic
The main advantage of trading using opposite Old Westbury and Nuveen Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Nuveen Strategic 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 Strategic will offset losses from the drop in Nuveen Strategic's long position.| Old Westbury vs. Fidelity Advisor Technology | Old Westbury vs. Dreyfus Technology Growth | Old Westbury vs. Blackrock Science Technology | Old Westbury vs. Firsthand Technology Opportunities |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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