Correlation Between Nuveen New and Alliancebernstein
Can any of the company-specific risk be diversified away by investing in both Nuveen New and Alliancebernstein 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 New and Alliancebernstein into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen New Jersey and Alliancebernstein National Municipalome, you can compare the effects of market volatilities on Nuveen New and Alliancebernstein 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 New with a short position of Alliancebernstein. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen New and Alliancebernstein.
Diversification Opportunities for Nuveen New and Alliancebernstein
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Nuveen and Alliancebernstein is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen New Jersey and Alliancebernstein National Mun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliancebernstein and Nuveen New 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 New Jersey are associated (or correlated) with Alliancebernstein. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliancebernstein has no effect on the direction of Nuveen New i.e., Nuveen New and Alliancebernstein go up and down completely randomly.
Pair Corralation between Nuveen New and Alliancebernstein
Assuming the 90 days horizon Nuveen New Jersey is expected to under-perform the Alliancebernstein. But the mutual fund apears to be less risky and, when comparing its historical volatility, Nuveen New Jersey is 1.15 times less risky than Alliancebernstein. The mutual fund trades about -0.03 of its potential returns per unit of risk. The Alliancebernstein National Municipalome is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 1,258 in Alliancebernstein National Municipalome on October 26, 2024 and sell it today you would lose (25.00) from holding Alliancebernstein National Municipalome or give up 1.99% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Nuveen New Jersey vs. Alliancebernstein National Mun
Performance |
| Timeline |
| Nuveen New Jersey |
| Alliancebernstein |
Nuveen New and Alliancebernstein Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen New and Alliancebernstein
The main advantage of trading using opposite Nuveen New and Alliancebernstein positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen New position performs unexpectedly, Alliancebernstein 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 Alliancebernstein will offset losses from the drop in Alliancebernstein's long position.| Nuveen New vs. Vanguard Total Stock | Nuveen New vs. Vanguard 500 Index | Nuveen New vs. Vanguard Total Stock | Nuveen New vs. Vanguard Total Stock |
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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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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