Correlation Between Aberdeen Global and Nuveen Municipalome

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

By analyzing existing cross correlation between Aberdeen Global Dynamic and Nuveen Municipalome, you can compare the effects of market volatilities on Aberdeen Global and Nuveen Municipalome 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 Aberdeen Global with a short position of Nuveen Municipalome. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Global and Nuveen Municipalome.

Diversification Opportunities for Aberdeen Global and Nuveen Municipalome

0.91

Correlation Coefficient

Aberdeen Global  Nuveen Municipalome

Almost no diversification

The 3 months correlation between Aberdeen and Nuveen is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Global Dynamic and Nuveen Municipalome in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Municipalome and Aberdeen Global 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 Aberdeen Global Dynamic are associated (or correlated) with Nuveen Municipalome. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Municipalome has no effect on the direction of Aberdeen Global i.e., Aberdeen Global and Nuveen Municipalome go up and down completely randomly.

Pair Corralation between Aberdeen Global and Nuveen Municipalome

Considering the 90-day investment horizon Aberdeen Global Dynamic is expected to generate 1.53 times more return on investment than Nuveen Municipalome. However, Aberdeen Global is 1.53 times more volatile than Nuveen Municipalome. It trades about 0.09 of its potential returns per unit of risk. Nuveen Municipalome is currently generating about 0.14 per unit of risk. If you would invest  990.00  in Aberdeen Global Dynamic on December 2, 2024 and sell it today you would earn a total of  43.00  from holding Aberdeen Global Dynamic or generate 4.34% return on investment over 90 days.

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

Aberdeen Global Dynamic  vs.  Nuveen Municipalome

Aberdeen Global Dynamic

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aberdeen Global Dynamic are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound technical and fundamental indicators, Aberdeen Global is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Nuveen Municipalome

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Municipalome are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. Despite fairly strong primary indicators, Nuveen Municipalome is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Aberdeen Global and Nuveen Municipalome

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

The idea behind Aberdeen Global Dynamic and Nuveen Municipalome 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.