Correlation Between Aquagold International and Nuveen Municipal

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

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

Diversification Opportunities for Aquagold International and Nuveen Municipal

-0.17

Correlation Coefficient

Aquagold International  Nuveen Municipal

Good diversification

The 3 months correlation between Aquagold and Nuveen is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Aquagold International and Nuveen Municipal Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Municipal Value and Aquagold International 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 Aquagold International are associated (or correlated) with Nuveen Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Municipal Value has no effect on the direction of Aquagold International i.e., Aquagold International and Nuveen Municipal go up and down completely randomly.

Pair Corralation between Aquagold International and Nuveen Municipal

Given the investment horizon of 90 days Aquagold International is expected to under-perform the Nuveen Municipal. In addition to that, Aquagold International is 14.7 times more volatile than Nuveen Municipal Value. It trades about -0.12 of its total potential returns per unit of risk. Nuveen Municipal Value is currently generating about 0.17 per unit of volatility. If you would invest  843.00  in Nuveen Municipal Value on December 22, 2024 and sell it today you would earn a total of  36.00  from holding Nuveen Municipal Value or generate 4.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	93.75%
Values	Daily Returns

Aquagold International  vs.  Nuveen Municipal Value

Aquagold International

Risk-Adjusted Performance

Very Weak

Over the last 90 days Aquagold International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Nuveen Municipal Value

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Municipal Value are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable basic indicators, Nuveen Municipal is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Aquagold International and Nuveen Municipal

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

The idea behind Aquagold International and Nuveen Municipal Value 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.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.