Correlation Between Columbia Minnesota and Nuveen Minnesota
Can any of the company-specific risk be diversified away by investing in both Columbia Minnesota and Nuveen Minnesota 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 Columbia Minnesota and Nuveen Minnesota into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Minnesota Tax Exempt and Nuveen Minnesota Municipal, you can compare the effects of market volatilities on Columbia Minnesota and Nuveen Minnesota 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 Columbia Minnesota with a short position of Nuveen Minnesota. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Minnesota and Nuveen Minnesota.
Diversification Opportunities for Columbia Minnesota and Nuveen Minnesota
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Columbia and Nuveen is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Minnesota Tax Exempt and Nuveen Minnesota Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Minnesota Mun and Columbia Minnesota 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 Columbia Minnesota Tax Exempt are associated (or correlated) with Nuveen Minnesota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Minnesota Mun has no effect on the direction of Columbia Minnesota i.e., Columbia Minnesota and Nuveen Minnesota go up and down completely randomly.
Pair Corralation between Columbia Minnesota and Nuveen Minnesota
Assuming the 90 days horizon Columbia Minnesota Tax Exempt is expected to generate 1.23 times more return on investment than Nuveen Minnesota. However, Columbia Minnesota is 1.23 times more volatile than Nuveen Minnesota Municipal. It trades about 0.2 of its potential returns per unit of risk. Nuveen Minnesota Municipal is currently generating about 0.2 per unit of risk. If you would invest 1,970 in Columbia Minnesota Tax Exempt on September 4, 2024 and sell it today you would earn a total of 32.00 from holding Columbia Minnesota Tax Exempt or generate 1.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Minnesota Tax Exempt vs. Nuveen Minnesota Municipal
Performance |
| Timeline |
| Columbia Minnesota Tax |
| Nuveen Minnesota Mun |
Columbia Minnesota and Nuveen Minnesota Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Minnesota and Nuveen Minnesota
The main advantage of trading using opposite Columbia Minnesota and Nuveen Minnesota positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Minnesota position performs unexpectedly, Nuveen Minnesota 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 Minnesota will offset losses from the drop in Nuveen Minnesota's long position.| Columbia Minnesota vs. Fidelity Advisor Energy | Columbia Minnesota vs. Gamco Natural Resources | Columbia Minnesota vs. Clearbridge Energy Mlp | Columbia Minnesota vs. Oil Gas Ultrasector |
| Nuveen Minnesota vs. Rational Strategic Allocation | Nuveen Minnesota vs. Scharf Global Opportunity | Nuveen Minnesota vs. Mirova Global Green | Nuveen Minnesota vs. Qs Global Equity |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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