Correlation Between City National and Nuveen California
Can any of the company-specific risk be diversified away by investing in both City National 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 City National and Nuveen California into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City National Rochdale and Nuveen California Municipal, you can compare the effects of market volatilities on City National 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 City National with a short position of Nuveen California. Check out your portfolio center. Please also check ongoing floating volatility patterns of City National and Nuveen California.
Diversification Opportunities for City National and Nuveen California
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between City and Nuveen is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding City National Rochdale and Nuveen California Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen California and City National 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 City National Rochdale 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 has no effect on the direction of City National i.e., City National and Nuveen California go up and down completely randomly.
Pair Corralation between City National and Nuveen California
Assuming the 90 days horizon City National Rochdale is expected to generate 0.32 times more return on investment than Nuveen California. However, City National Rochdale is 3.17 times less risky than Nuveen California. It trades about 0.26 of its potential returns per unit of risk. Nuveen California Municipal is currently generating about -0.11 per unit of risk. If you would invest 1,965 in City National Rochdale on December 8, 2024 and sell it today you would earn a total of 7.00 from holding City National Rochdale or generate 0.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
City National Rochdale vs. Nuveen California Municipal
Performance |
| Timeline |
| City National Rochdale |
| Nuveen California |
City National and Nuveen California Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City National and Nuveen California
The main advantage of trading using opposite City National and Nuveen California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City National 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.| City National vs. Short Term Government Fund | ||
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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