Correlation Between Nuveen Municipal and Dreyfus Short
Can any of the company-specific risk be diversified away by investing in both Nuveen Municipal and Dreyfus Short 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 Nuveen Municipal and Dreyfus Short into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Municipal Credit and Dreyfus Short Intermediate, you can compare the effects of market volatilities on Nuveen Municipal and Dreyfus Short 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 Nuveen Municipal with a short position of Dreyfus Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Municipal and Dreyfus Short.
Diversification Opportunities for Nuveen Municipal and Dreyfus Short
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nuveen and Dreyfus is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Municipal Credit and Dreyfus Short Intermediate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Short Interm and Nuveen Municipal 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 Nuveen Municipal Credit are associated (or correlated) with Dreyfus Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Short Interm has no effect on the direction of Nuveen Municipal i.e., Nuveen Municipal and Dreyfus Short go up and down completely randomly.
Pair Corralation between Nuveen Municipal and Dreyfus Short
Assuming the 90 days horizon Nuveen Municipal Credit is expected to generate 4.99 times more return on investment than Dreyfus Short. However, Nuveen Municipal is 4.99 times more volatile than Dreyfus Short Intermediate. It trades about 0.53 of its potential returns per unit of risk. Dreyfus Short Intermediate is currently generating about 0.32 per unit of risk. If you would invest 1,177 in Nuveen Municipal Credit on September 12, 2024 and sell it today you would earn a total of 31.00 from holding Nuveen Municipal Credit or generate 2.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Municipal Credit vs. Dreyfus Short Intermediate
Performance |
| Timeline |
| Nuveen Municipal Credit |
| Dreyfus Short Interm |
Nuveen Municipal and Dreyfus Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Municipal and Dreyfus Short
The main advantage of trading using opposite Nuveen Municipal and Dreyfus Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Municipal position performs unexpectedly, Dreyfus Short 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 Dreyfus Short will offset losses from the drop in Dreyfus Short's long position.| Nuveen Municipal vs. Dreyfus Short Intermediate | Nuveen Municipal vs. Touchstone Ultra Short | Nuveen Municipal vs. Boston Partners Longshort | Nuveen Municipal vs. Kentucky Tax Free Short To Medium |
| Dreyfus Short vs. Vanguard Limited Term Tax Exempt | Dreyfus Short vs. Vanguard Limited Term Tax Exempt | Dreyfus Short vs. Vanguard Short Term Tax Exempt | Dreyfus Short vs. Vanguard Short Term Tax Exempt |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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