Correlation Between Western Asset and Nuveen Kansas
Can any of the company-specific risk be diversified away by investing in both Western Asset and Nuveen Kansas 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 Western Asset and Nuveen Kansas into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Diversified and Nuveen Kansas Municipal, you can compare the effects of market volatilities on Western Asset and Nuveen Kansas 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 Western Asset with a short position of Nuveen Kansas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Nuveen Kansas.
Diversification Opportunities for Western Asset and Nuveen Kansas
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Western and Nuveen is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Diversified and Nuveen Kansas Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Kansas Municipal and Western Asset 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 Western Asset Diversified are associated (or correlated) with Nuveen Kansas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Kansas Municipal has no effect on the direction of Western Asset i.e., Western Asset and Nuveen Kansas go up and down completely randomly.
Pair Corralation between Western Asset and Nuveen Kansas
Assuming the 90 days horizon Western Asset is expected to generate 2.31 times less return on investment than Nuveen Kansas. But when comparing it to its historical volatility, Western Asset Diversified is 1.03 times less risky than Nuveen Kansas. It trades about 0.11 of its potential returns per unit of risk. Nuveen Kansas Municipal is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 991.00 in Nuveen Kansas Municipal on September 2, 2024 and sell it today you would earn a total of 15.00 from holding Nuveen Kansas Municipal or generate 1.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Diversified vs. Nuveen Kansas Municipal
Performance |
| Timeline |
| Western Asset Diversified |
| Nuveen Kansas Municipal |
Western Asset and Nuveen Kansas Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Nuveen Kansas
The main advantage of trading using opposite Western Asset and Nuveen Kansas positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset position performs unexpectedly, Nuveen Kansas 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 Kansas will offset losses from the drop in Nuveen Kansas' long position.| Western Asset vs. Morningstar Unconstrained Allocation | Western Asset vs. Old Westbury Large | Western Asset vs. T Rowe Price | Western Asset vs. Enhanced Large Pany |
| Nuveen Kansas vs. Nuveen Symphony Floating | Nuveen Kansas vs. Nuveen Symphony Floating | Nuveen Kansas vs. Nuveen Symphony Floating | Nuveen Kansas vs. Nuveen Symphony Floating |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Stocks Directory Find actively traded stocks across global markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |