Correlation Between Nuveen Municipal and Dodge Cox
Can any of the company-specific risk be diversified away by investing in both Nuveen Municipal and Dodge Cox 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 Dodge Cox into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Municipal High and Dodge Cox Stock, you can compare the effects of market volatilities on Nuveen Municipal and Dodge Cox 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 Dodge Cox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Municipal and Dodge Cox.
Diversification Opportunities for Nuveen Municipal and Dodge Cox
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Nuveen and Dodge is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Municipal High and Dodge Cox Stock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dodge Cox Stock 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 High are associated (or correlated) with Dodge Cox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dodge Cox Stock has no effect on the direction of Nuveen Municipal i.e., Nuveen Municipal and Dodge Cox go up and down completely randomly.
Pair Corralation between Nuveen Municipal and Dodge Cox
Assuming the 90 days horizon Nuveen Municipal High is expected to generate 0.32 times more return on investment than Dodge Cox. However, Nuveen Municipal High is 3.15 times less risky than Dodge Cox. It trades about -0.31 of its potential returns per unit of risk. Dodge Cox Stock is currently generating about -0.3 per unit of risk. If you would invest 1,134 in Nuveen Municipal High on September 25, 2024 and sell it today you would lose (36.00) from holding Nuveen Municipal High or give up 3.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nuveen Municipal High vs. Dodge Cox Stock
Performance |
| Timeline |
| Nuveen Municipal High |
| Dodge Cox Stock |
Nuveen Municipal and Dodge Cox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Municipal and Dodge Cox
The main advantage of trading using opposite Nuveen Municipal and Dodge Cox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Municipal position performs unexpectedly, Dodge Cox 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 Dodge Cox will offset losses from the drop in Dodge Cox's long position.| Nuveen Municipal vs. Vanguard Total Stock | Nuveen Municipal vs. Vanguard 500 Index | Nuveen Municipal vs. Vanguard Total Stock | Nuveen Municipal vs. Vanguard Total Stock |
| Dodge Cox vs. Ab Global Risk | Dodge Cox vs. Nuveen Municipal High | Dodge Cox vs. Ab High Income | Dodge Cox vs. Alliancebernstein Global High |
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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