Correlation Between Nuveen North and Nuveen Georgia

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

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

Diversification Opportunities for Nuveen North and Nuveen Georgia

0.98

Correlation Coefficient

Nuveen North  Nuveen Georgia

Almost no diversification

The 3 months correlation between Nuveen and Nuveen is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen North Carolina and Nuveen Georgia Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Georgia Municipal and Nuveen North 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 North Carolina are associated (or correlated) with Nuveen Georgia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Georgia Municipal has no effect on the direction of Nuveen North i.e., Nuveen North and Nuveen Georgia go up and down completely randomly.

Pair Corralation between Nuveen North and Nuveen Georgia

Assuming the 90 days horizon Nuveen North Carolina is expected to generate 1.14 times more return on investment than Nuveen Georgia. However, Nuveen North is 1.14 times more volatile than Nuveen Georgia Municipal. It trades about -0.26 of its potential returns per unit of risk. Nuveen Georgia Municipal is currently generating about -0.32 per unit of risk. If you would invest  1,018  in Nuveen North Carolina on October 8, 2024 and sell it today you would lose (16.00) from holding Nuveen North Carolina or give up 1.57% of portfolio value over 90 days.

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

Nuveen North Carolina  vs.  Nuveen Georgia Municipal

Nuveen North Carolina

Risk-Adjusted Performance

0 of 100

Very Weak

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

Nuveen Georgia Municipal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen Georgia Municipal has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Nuveen Georgia 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 North and Nuveen Georgia

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

The idea behind Nuveen North Carolina and Nuveen Georgia 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.