Correlation Between Thornburg Strategic and Nuveen Strategic
Can any of the company-specific risk be diversified away by investing in both Thornburg Strategic 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 Thornburg Strategic and Nuveen Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thornburg Strategic Municipal and Nuveen Strategic Municipal, you can compare the effects of market volatilities on Thornburg Strategic 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 Thornburg Strategic with a short position of Nuveen Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thornburg Strategic and Nuveen Strategic.
Diversification Opportunities for Thornburg Strategic and Nuveen Strategic
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Thornburg and Nuveen is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Thornburg Strategic Municipal 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 Thornburg Strategic 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 Thornburg Strategic Municipal 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 Thornburg Strategic i.e., Thornburg Strategic and Nuveen Strategic go up and down completely randomly.
Pair Corralation between Thornburg Strategic and Nuveen Strategic
Assuming the 90 days horizon Thornburg Strategic is expected to generate 2.66 times less return on investment than Nuveen Strategic. But when comparing it to its historical volatility, Thornburg Strategic Municipal is 1.33 times less risky than Nuveen Strategic. It trades about 0.04 of its potential returns per unit of risk. Nuveen Strategic Municipal is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 995.00 in Nuveen Strategic Municipal on November 3, 2024 and sell it today you would earn a total of 4.00 from holding Nuveen Strategic Municipal or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.24% |
| Values | Daily Returns |
Thornburg Strategic Municipal vs. Nuveen Strategic Municipal
Performance |
| Timeline |
| Thornburg Strategic |
| Nuveen Strategic Mun |
Thornburg Strategic and Nuveen Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thornburg Strategic and Nuveen Strategic
The main advantage of trading using opposite Thornburg Strategic and Nuveen Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thornburg Strategic 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.| Thornburg Strategic vs. Thornburg Value Fund | Thornburg Strategic vs. Thornburg Value Fund | Thornburg Strategic vs. Thornburg New York | Thornburg Strategic vs. Thornburg International Value |
| Nuveen Strategic vs. Wilmington Diversified Income | Nuveen Strategic vs. Madison Diversified Income | Nuveen Strategic vs. Calvert Conservative Allocation | Nuveen Strategic vs. Global Diversified Income |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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