Correlation Between Schwab Treasury and Nuveen Municipal
Can any of the company-specific risk be diversified away by investing in both Schwab Treasury 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 Schwab Treasury and Nuveen Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Schwab Treasury Money and Nuveen Municipal High, you can compare the effects of market volatilities on Schwab Treasury 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 Schwab Treasury with a short position of Nuveen Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Schwab Treasury and Nuveen Municipal.
Diversification Opportunities for Schwab Treasury and Nuveen Municipal
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Schwab and Nuveen is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Schwab Treasury Money and Nuveen Municipal High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Municipal High and Schwab Treasury 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 Schwab Treasury Money 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 High has no effect on the direction of Schwab Treasury i.e., Schwab Treasury and Nuveen Municipal go up and down completely randomly.
Pair Corralation between Schwab Treasury and Nuveen Municipal
If you would invest 1,124 in Nuveen Municipal High on September 14, 2024 and sell it today you would earn a total of 18.00 from holding Nuveen Municipal High or generate 1.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Schwab Treasury Money vs. Nuveen Municipal High
Performance |
| Timeline |
| Schwab Treasury Money |
| Nuveen Municipal High |
Schwab Treasury and Nuveen Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Schwab Treasury and Nuveen Municipal
The main advantage of trading using opposite Schwab Treasury and Nuveen Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Schwab Treasury 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.| Schwab Treasury vs. Jpmorgan Diversified Fund | Schwab Treasury vs. Guggenheim Diversified Income | Schwab Treasury vs. Prudential Core Conservative | Schwab Treasury vs. Elfun Diversified Fund |
| Nuveen Municipal vs. Vanguard Total Stock | Nuveen Municipal vs. Vanguard 500 Index | Nuveen Municipal vs. Vanguard Total Stock | Nuveen Municipal vs. Vanguard Total Stock |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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