Correlation Between Nuveen Limited and Nuveen Nebraska

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

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

Diversification Opportunities for Nuveen Limited and Nuveen Nebraska

0.97

Correlation Coefficient

Nuveen Limited  Nuveen Nebraska

Almost no diversification

The 3 months correlation between Nuveen and Nuveen is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Limited Term and Nuveen Nebraska Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Nebraska Municipal and Nuveen Limited 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 Nuveen Limited Term are associated (or correlated) with Nuveen Nebraska. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Nebraska Municipal has no effect on the direction of Nuveen Limited i.e., Nuveen Limited and Nuveen Nebraska go up and down completely randomly.

Pair Corralation between Nuveen Limited and Nuveen Nebraska

Assuming the 90 days horizon Nuveen Limited Term is expected to generate about the same return on investment as Nuveen Nebraska Municipal. But, Nuveen Limited Term is 1.94 times less risky than Nuveen Nebraska. It trades about 0.04 of its potential returns per unit of risk. Nuveen Nebraska Municipal is currently generating about 0.02 per unit of risk. If you would invest  950.00  in Nuveen Nebraska Municipal on October 11, 2024 and sell it today you would earn a total of  21.00  from holding Nuveen Nebraska Municipal or generate 2.21% return on investment over 90 days.

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

Nuveen Limited Term  vs.  Nuveen Nebraska Municipal

Nuveen Limited Term

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen Limited Term has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking indicators, Nuveen Limited is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nuveen Nebraska Municipal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen Nebraska Municipal has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Nuveen Nebraska is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nuveen Limited and Nuveen Nebraska

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

The idea behind Nuveen Limited Term and Nuveen Nebraska 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.