Correlation Between Platinum Asia and Nuveen Municipal
Can any of the company-specific risk be diversified away by investing in both Platinum Asia 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 Platinum Asia and Nuveen Municipal 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 Municipal Credit, you can compare the effects of market volatilities on Platinum Asia 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 Platinum Asia with a short position of Nuveen Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Asia and Nuveen Municipal.
Diversification Opportunities for Platinum Asia and Nuveen Municipal
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Platinum and Nuveen is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Asia Investments 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 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 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 Platinum Asia i.e., Platinum Asia and Nuveen Municipal go up and down completely randomly.
Pair Corralation between Platinum Asia and Nuveen Municipal
Considering the 90-day investment horizon Platinum Asia Investments is expected to under-perform the Nuveen Municipal. In addition to that, Platinum Asia is 1.34 times more volatile than Nuveen Municipal Credit. It trades about -0.03 of its total potential returns per unit of risk. Nuveen Municipal Credit is currently generating about 0.43 per unit of volatility. If you would invest 1,242 in Nuveen Municipal Credit on September 2, 2024 and sell it today you would earn a total of 61.00 from holding Nuveen Municipal Credit or generate 4.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Platinum Asia Investments vs. Nuveen Municipal Credit
Performance |
| Timeline |
| Platinum Asia Investments |
| Nuveen Municipal Credit |
Platinum Asia and Nuveen Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Asia and Nuveen Municipal
The main advantage of trading using opposite Platinum Asia and Nuveen Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Asia 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.| 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 Municipal vs. Nuveen Amt Free Municipal | Nuveen Municipal vs. Nuveen Dividend Advantage | Nuveen Municipal vs. Nuveen Municipal High | Nuveen Municipal vs. Nuveen Municipal Credit |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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