Correlation Between Nuveen Minnesota and Payden Rygel

Can any of the company-specific risk be diversified away by investing in both Nuveen Minnesota and Payden Rygel 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 Payden Rygel 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 Payden Rygel Investment, you can compare the effects of market volatilities on Nuveen Minnesota and Payden Rygel 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 Payden Rygel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Minnesota and Payden Rygel.

Diversification Opportunities for Nuveen Minnesota and Payden Rygel

0.58

Correlation Coefficient

Nuveen Minnesota  Payden Rygel

Very weak diversification

The 3 months correlation between Nuveen and Payden is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Minnesota Municipal and Payden Rygel Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Rygel Investment 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 Payden Rygel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Rygel Investment has no effect on the direction of Nuveen Minnesota i.e., Nuveen Minnesota and Payden Rygel go up and down completely randomly.

Pair Corralation between Nuveen Minnesota and Payden Rygel

Assuming the 90 days horizon Nuveen Minnesota Municipal is expected to under-perform the Payden Rygel. But the mutual fund apears to be less risky and, when comparing its historical volatility, Nuveen Minnesota Municipal is 1.83 times less risky than Payden Rygel. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Payden Rygel Investment is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  448.00  in Payden Rygel Investment on December 4, 2024 and sell it today you would earn a total of  2.00  from holding Payden Rygel Investment or generate 0.45% 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.  Payden Rygel Investment

Nuveen Minnesota Mun

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nuveen Minnesota Municipal has generated negative risk-adjusted returns adding no value to fund investors. 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.

Payden Rygel Investment

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Payden Rygel Investment are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Payden Rygel 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 Payden Rygel

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

The idea behind Nuveen Minnesota Municipal and Payden Rygel Investment 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.