Correlation Between Travelers Companies and Nuveen Municipal
Can any of the company-specific risk be diversified away by investing in both Travelers Companies 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 Travelers Companies and Nuveen Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Travelers Companies and Nuveen Municipal Credit, you can compare the effects of market volatilities on Travelers Companies 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 Travelers Companies with a short position of Nuveen Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Travelers Companies and Nuveen Municipal.
Diversification Opportunities for Travelers Companies and Nuveen Municipal
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Travelers and Nuveen is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding The Travelers Companies 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 Travelers Companies 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 The Travelers Companies 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 Travelers Companies i.e., Travelers Companies and Nuveen Municipal go up and down completely randomly.
Pair Corralation between Travelers Companies and Nuveen Municipal
Considering the 90-day investment horizon The Travelers Companies is expected to generate 1.82 times more return on investment than Nuveen Municipal. However, Travelers Companies is 1.82 times more volatile than Nuveen Municipal Credit. It trades about 0.05 of its potential returns per unit of risk. Nuveen Municipal Credit is currently generating about -0.04 per unit of risk. If you would invest 25,735 in The Travelers Companies on August 24, 2024 and sell it today you would earn a total of 346.00 from holding The Travelers Companies or generate 1.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Travelers Companies vs. Nuveen Municipal Credit
Performance |
| Timeline |
| The Travelers Companies |
| Nuveen Municipal Credit |
Travelers Companies and Nuveen Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Travelers Companies and Nuveen Municipal
The main advantage of trading using opposite Travelers Companies and Nuveen Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Travelers Companies 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.| Travelers Companies vs. Amtech Systems | Travelers Companies vs. Gold Fields Ltd | Travelers Companies vs. Aegean Airlines SA | Travelers Companies vs. Merck Company |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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