Correlation Between Platinum Asia and Nuveen California
Can any of the company-specific risk be diversified away by investing in both Platinum Asia and Nuveen California 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 Platinum Asia and Nuveen California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Platinum Asia Investments and Nuveen California Amt, you can compare the effects of market volatilities on Platinum Asia and Nuveen California 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 Platinum Asia with a short position of Nuveen California. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Asia and Nuveen California.
Diversification Opportunities for Platinum Asia and Nuveen California
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Platinum and Nuveen is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asia Investments and Nuveen California Amt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen California Amt and Platinum Asia 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 Platinum Asia Investments are associated (or correlated) with Nuveen California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen California Amt has no effect on the direction of Platinum Asia i.e., Platinum Asia and Nuveen California go up and down completely randomly.
Pair Corralation between Platinum Asia and Nuveen California
Considering the 90-day investment horizon Platinum Asia is expected to generate 1.48 times less return on investment than Nuveen California. But when comparing it to its historical volatility, Platinum Asia Investments is 1.24 times less risky than Nuveen California. It trades about 0.07 of its potential returns per unit of risk. Nuveen California Amt is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,030 in Nuveen California Amt on August 31, 2024 and sell it today you would earn a total of 255.00 from holding Nuveen California Amt or generate 24.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Platinum Asia Investments vs. Nuveen California Amt
Performance |
| Timeline |
| Platinum Asia Investments |
| Nuveen California Amt |
Platinum Asia and Nuveen California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Asia and Nuveen California
The main advantage of trading using opposite Platinum Asia and Nuveen California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Asia position performs unexpectedly, Nuveen California 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 California will offset losses from the drop in Nuveen California's long position.| Platinum Asia vs. The Gabelli Dividend | Platinum Asia vs. Voya Global Advantage | Platinum Asia vs. Invesco California Value | Platinum Asia vs. John Hancock Investors |
| Nuveen California vs. BlackRock California Municipal | Nuveen California vs. Blackrock Muniyield Quality | Nuveen California vs. Blackrock Muni Intermediate | Nuveen California vs. Munivest Fund |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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