Correlation Between Georgia Tax-free and Nuveen Strategic
Can any of the company-specific risk be diversified away by investing in both Georgia Tax-free and Nuveen Strategic 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 Georgia Tax-free and Nuveen Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Georgia Tax Free Bond and Nuveen Strategic Municipal, you can compare the effects of market volatilities on Georgia Tax-free and Nuveen Strategic 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 Georgia Tax-free with a short position of Nuveen Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Georgia Tax-free and Nuveen Strategic.
Diversification Opportunities for Georgia Tax-free and Nuveen Strategic
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Georgia and Nuveen is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Georgia Tax Free Bond and Nuveen Strategic Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Strategic Mun and Georgia Tax-free 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 Georgia Tax Free Bond are associated (or correlated) with Nuveen Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Strategic Mun has no effect on the direction of Georgia Tax-free i.e., Georgia Tax-free and Nuveen Strategic go up and down completely randomly.
Pair Corralation between Georgia Tax-free and Nuveen Strategic
Assuming the 90 days horizon Georgia Tax Free Bond is expected to under-perform the Nuveen Strategic. In addition to that, Georgia Tax-free is 1.11 times more volatile than Nuveen Strategic Municipal. It trades about -0.05 of its total potential returns per unit of risk. Nuveen Strategic Municipal is currently generating about 0.02 per unit of volatility. If you would invest 999.00 in Nuveen Strategic Municipal on November 2, 2024 and sell it today you would earn a total of 1.00 from holding Nuveen Strategic Municipal or generate 0.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Georgia Tax Free Bond vs. Nuveen Strategic Municipal
Performance |
| Timeline |
| Georgia Tax Free |
| Nuveen Strategic Mun |
Georgia Tax-free and Nuveen Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Georgia Tax-free and Nuveen Strategic
The main advantage of trading using opposite Georgia Tax-free and Nuveen Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Georgia Tax-free position performs unexpectedly, Nuveen Strategic 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 Strategic will offset losses from the drop in Nuveen Strategic's long position.| Georgia Tax-free vs. Qs Global Equity | Georgia Tax-free vs. Us Global Investors | Georgia Tax-free vs. Gmo Global Equity | Georgia Tax-free vs. Wisdomtree Siegel Global |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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