Correlation Between Nuveen Minnesota and Loomis Sayles

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

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

Diversification Opportunities for Nuveen Minnesota and Loomis Sayles

0.45

Correlation Coefficient

Nuveen Minnesota  Loomis Sayles

Very weak diversification

The 3 months correlation between Nuveen and Loomis is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Minnesota Municipal and Loomis Sayles E in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loomis Sayles E and Nuveen Minnesota 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 Minnesota Municipal are associated (or correlated) with Loomis Sayles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loomis Sayles E has no effect on the direction of Nuveen Minnesota i.e., Nuveen Minnesota and Loomis Sayles go up and down completely randomly.

Pair Corralation between Nuveen Minnesota and Loomis Sayles

Assuming the 90 days horizon Nuveen Minnesota Municipal is expected to generate 0.72 times more return on investment than Loomis Sayles. However, Nuveen Minnesota Municipal is 1.38 times less risky than Loomis Sayles. It trades about 0.1 of its potential returns per unit of risk. Loomis Sayles E is currently generating about -0.05 per unit of risk. If you would invest  1,075  in Nuveen Minnesota Municipal on September 3, 2024 and sell it today you would earn a total of  15.00  from holding Nuveen Minnesota Municipal or generate 1.4% return on investment over 90 days.

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

Nuveen Minnesota Municipal  vs.  Loomis Sayles E

Nuveen Minnesota Mun

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Minnesota Municipal are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Nuveen Minnesota is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Loomis Sayles E

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Loomis Sayles E has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Loomis Sayles 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 Minnesota and Loomis Sayles

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

The idea behind Nuveen Minnesota Municipal and Loomis Sayles E 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.