Correlation Between VanEck CEF and SPDR Nuveen
Can any of the company-specific risk be diversified away by investing in both VanEck CEF and SPDR Nuveen 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 VanEck CEF and SPDR Nuveen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VanEck CEF Municipal and SPDR Nuveen Bloomberg, you can compare the effects of market volatilities on VanEck CEF and SPDR Nuveen 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 VanEck CEF with a short position of SPDR Nuveen. Check out your portfolio center. Please also check ongoing floating volatility patterns of VanEck CEF and SPDR Nuveen.
Diversification Opportunities for VanEck CEF and SPDR Nuveen
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VanEck and SPDR is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding VanEck CEF Municipal and SPDR Nuveen Bloomberg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPDR Nuveen Bloomberg and VanEck CEF 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 VanEck CEF Municipal are associated (or correlated) with SPDR Nuveen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPDR Nuveen Bloomberg has no effect on the direction of VanEck CEF i.e., VanEck CEF and SPDR Nuveen go up and down completely randomly.
Pair Corralation between VanEck CEF and SPDR Nuveen
Given the investment horizon of 90 days VanEck CEF Municipal is expected to generate 1.35 times more return on investment than SPDR Nuveen. However, VanEck CEF is 1.35 times more volatile than SPDR Nuveen Bloomberg. It trades about 0.14 of its potential returns per unit of risk. SPDR Nuveen Bloomberg is currently generating about 0.11 per unit of risk. If you would invest 2,067 in VanEck CEF Municipal on August 25, 2024 and sell it today you would earn a total of 170.00 from holding VanEck CEF Municipal or generate 8.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VanEck CEF Municipal vs. SPDR Nuveen Bloomberg
Performance |
| Timeline |
| VanEck CEF Municipal |
| SPDR Nuveen Bloomberg |
VanEck CEF and SPDR Nuveen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VanEck CEF and SPDR Nuveen
The main advantage of trading using opposite VanEck CEF and SPDR Nuveen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VanEck CEF position performs unexpectedly, SPDR Nuveen 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 SPDR Nuveen will offset losses from the drop in SPDR Nuveen's long position.| VanEck CEF vs. SPDR Nuveen Bloomberg | VanEck CEF vs. VanEck High Yield | VanEck CEF vs. VanEck Short Muni | VanEck CEF vs. VanEck Long Muni |
| SPDR Nuveen vs. VanEck High Yield | SPDR Nuveen vs. VanEck Short High | SPDR Nuveen vs. SPDR Nuveen Bloomberg | SPDR Nuveen vs. SPDR Nuveen Bloomberg |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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