Correlation Between Arbor Realty and Nuveen Select

Can any of the company-specific risk be diversified away by investing in both Arbor Realty and Nuveen Select 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 Arbor Realty and Nuveen Select into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Arbor Realty Trust and Nuveen Select Tax Free, you can compare the effects of market volatilities on Arbor Realty and Nuveen Select 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 Arbor Realty with a short position of Nuveen Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arbor Realty and Nuveen Select.

Diversification Opportunities for Arbor Realty and Nuveen Select

-0.45

Correlation Coefficient

Arbor Realty  Nuveen Select

Very good diversification

The 3 months correlation between Arbor and Nuveen is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Arbor Realty Trust and Nuveen Select Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Select Tax and Arbor Realty 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 Arbor Realty Trust are associated (or correlated) with Nuveen Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Select Tax has no effect on the direction of Arbor Realty i.e., Arbor Realty and Nuveen Select go up and down completely randomly.

Pair Corralation between Arbor Realty and Nuveen Select

Considering the 90-day investment horizon Arbor Realty Trust is expected to under-perform the Nuveen Select. In addition to that, Arbor Realty is 2.82 times more volatile than Nuveen Select Tax Free. It trades about -0.15 of its total potential returns per unit of risk. Nuveen Select Tax Free is currently generating about 0.07 per unit of volatility. If you would invest  1,481  in Nuveen Select Tax Free on October 26, 2024 and sell it today you would earn a total of  10.00  from holding Nuveen Select Tax Free or generate 0.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Arbor Realty Trust  vs.  Nuveen Select Tax Free

Arbor Realty Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arbor Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's fundamental drivers remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Nuveen Select Tax

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Select Tax Free are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Nuveen Select is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Arbor Realty and Nuveen Select

The main advantage of trading using opposite Arbor Realty and Nuveen Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arbor Realty position performs unexpectedly, Nuveen Select 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 Select will offset losses from the drop in Nuveen Select's long position.

The idea behind Arbor Realty Trust and Nuveen Select Tax Free pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.