Correlation Between Astar and Nuveen Connecticut

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

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

Diversification Opportunities for Astar and Nuveen Connecticut

-0.4

Correlation Coefficient

Astar  Nuveen Connecticut

Very good diversification

The 3 months correlation between Astar and Nuveen is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Nuveen Necticut Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Necticut Municipal and Astar 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 Astar are associated (or correlated) with Nuveen Connecticut. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Necticut Municipal has no effect on the direction of Astar i.e., Astar and Nuveen Connecticut go up and down completely randomly.

Pair Corralation between Astar and Nuveen Connecticut

Assuming the 90 days trading horizon Astar is expected to under-perform the Nuveen Connecticut. In addition to that, Astar is 20.91 times more volatile than Nuveen Necticut Municipal. It trades about -0.18 of its total potential returns per unit of risk. Nuveen Necticut Municipal is currently generating about 0.07 per unit of volatility. If you would invest  949.00  in Nuveen Necticut Municipal on December 21, 2024 and sell it today you would earn a total of  9.00  from holding Nuveen Necticut Municipal or generate 0.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	93.65%
Values	Daily Returns

Astar  vs.  Nuveen Necticut Municipal

Astar

Risk-Adjusted Performance

Very Weak

Over the last 90 days Astar has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Astar shareholders.

Nuveen Necticut Municipal

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Necticut Municipal are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Nuveen Connecticut is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Astar and Nuveen Connecticut

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

The idea behind Astar and Nuveen Necticut Municipal 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .