Correlation Between Commodities Strategy and Nuveen Municipal
Can any of the company-specific risk be diversified away by investing in both Commodities Strategy 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 Commodities Strategy and Nuveen Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Commodities Strategy Fund and Nuveen Municipal Credit, you can compare the effects of market volatilities on Commodities Strategy 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 Commodities Strategy with a short position of Nuveen Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Commodities Strategy and Nuveen Municipal.
Diversification Opportunities for Commodities Strategy and Nuveen Municipal
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Commodities and Nuveen is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Commodities Strategy Fund 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 Commodities Strategy 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 Commodities Strategy Fund 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 Commodities Strategy i.e., Commodities Strategy and Nuveen Municipal go up and down completely randomly.
Pair Corralation between Commodities Strategy and Nuveen Municipal
Assuming the 90 days horizon Commodities Strategy is expected to generate 1.21 times less return on investment than Nuveen Municipal. In addition to that, Commodities Strategy is 1.63 times more volatile than Nuveen Municipal Credit. It trades about 0.11 of its total potential returns per unit of risk. Nuveen Municipal Credit is currently generating about 0.22 per unit of volatility. If you would invest 1,226 in Nuveen Municipal Credit on November 3, 2024 and sell it today you would earn a total of 32.00 from holding Nuveen Municipal Credit or generate 2.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Commodities Strategy Fund vs. Nuveen Municipal Credit
Performance |
| Timeline |
| Commodities Strategy |
| Nuveen Municipal Credit |
Commodities Strategy and Nuveen Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Commodities Strategy and Nuveen Municipal
The main advantage of trading using opposite Commodities Strategy and Nuveen Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commodities Strategy 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.| Commodities Strategy vs. Financial Industries Fund | Commodities Strategy vs. Ab Government Exchange | Commodities Strategy vs. Angel Oak Financial | Commodities Strategy vs. Aig Government Money |
| 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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