Correlation Between SPDR Nuveen and Overlay Shares
Can any of the company-specific risk be diversified away by investing in both SPDR Nuveen and Overlay Shares 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 SPDR Nuveen and Overlay Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPDR Nuveen Bloomberg and Overlay Shares Municipal, you can compare the effects of market volatilities on SPDR Nuveen and Overlay Shares 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 SPDR Nuveen with a short position of Overlay Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Nuveen and Overlay Shares.
Diversification Opportunities for SPDR Nuveen and Overlay Shares
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SPDR and Overlay is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Nuveen Bloomberg and Overlay Shares Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Overlay Shares Municipal and SPDR Nuveen 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 SPDR Nuveen Bloomberg are associated (or correlated) with Overlay Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Overlay Shares Municipal has no effect on the direction of SPDR Nuveen i.e., SPDR Nuveen and Overlay Shares go up and down completely randomly.
Pair Corralation between SPDR Nuveen and Overlay Shares
Considering the 90-day investment horizon SPDR Nuveen is expected to generate 41.67 times less return on investment than Overlay Shares. But when comparing it to its historical volatility, SPDR Nuveen Bloomberg is 1.38 times less risky than Overlay Shares. It trades about 0.0 of its potential returns per unit of risk. Overlay Shares Municipal is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,190 in Overlay Shares Municipal on November 18, 2024 and sell it today you would earn a total of 16.00 from holding Overlay Shares Municipal or generate 0.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SPDR Nuveen Bloomberg vs. Overlay Shares Municipal
Performance |
| Timeline |
| SPDR Nuveen Bloomberg |
| Overlay Shares Municipal |
SPDR Nuveen and Overlay Shares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPDR Nuveen and Overlay Shares
The main advantage of trading using opposite SPDR Nuveen and Overlay Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPDR Nuveen position performs unexpectedly, Overlay Shares 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 Overlay Shares will offset losses from the drop in Overlay Shares' long position.| SPDR Nuveen vs. SPDR Nuveen Bloomberg | SPDR Nuveen vs. Invesco National AMT Free | SPDR Nuveen vs. VanEck Intermediate Muni | SPDR Nuveen vs. iShares National Muni |
| Overlay Shares vs. Overlay Shares Core | Overlay Shares vs. Overlay Shares Large | Overlay Shares vs. Overlay Shares Foreign | Overlay Shares vs. OVS SpA |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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