Correlation Between Nuveen Arizona and Total Return

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

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

Diversification Opportunities for Nuveen Arizona and Total Return

0.0

Correlation Coefficient

Nuveen Arizona  Total Return

Pay attention - limited upside

The 3 months correlation between Nuveen and Total is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Arizona Municipal and Total Return Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Return Bond and Nuveen Arizona 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 Arizona Municipal are associated (or correlated) with Total Return. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Return Bond has no effect on the direction of Nuveen Arizona i.e., Nuveen Arizona and Total Return go up and down completely randomly.

Pair Corralation between Nuveen Arizona and Total Return

If you would invest  1,001  in Nuveen Arizona Municipal on December 21, 2024 and sell it today you would earn a total of  5.00  from holding Nuveen Arizona Municipal or generate 0.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Nuveen Arizona Municipal  vs.  Total Return Bond

Nuveen Arizona Municipal

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Arizona Municipal are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Nuveen Arizona is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Total Return Bond

Risk-Adjusted Performance

Very Weak

Over the last 90 days Total Return Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Total Return 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 Arizona and Total Return

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

The idea behind Nuveen Arizona Municipal and Total Return Bond 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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.