Correlation Between DWS Municipal and Nuveen Credit
Can any of the company-specific risk be diversified away by investing in both DWS Municipal and Nuveen Credit 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 DWS Municipal and Nuveen Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DWS Municipal Income and Nuveen Credit Strategies, you can compare the effects of market volatilities on DWS Municipal and Nuveen Credit 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 DWS Municipal with a short position of Nuveen Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of DWS Municipal and Nuveen Credit.
Diversification Opportunities for DWS Municipal and Nuveen Credit
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DWS and Nuveen is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding DWS Municipal Income and Nuveen Credit Strategies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Credit Strategies and DWS Municipal 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 DWS Municipal Income are associated (or correlated) with Nuveen Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Credit Strategies has no effect on the direction of DWS Municipal i.e., DWS Municipal and Nuveen Credit go up and down completely randomly.
Pair Corralation between DWS Municipal and Nuveen Credit
Considering the 90-day investment horizon DWS Municipal Income is expected to generate 0.75 times more return on investment than Nuveen Credit. However, DWS Municipal Income is 1.33 times less risky than Nuveen Credit. It trades about 0.05 of its potential returns per unit of risk. Nuveen Credit Strategies is currently generating about -0.11 per unit of risk. If you would invest 925.00 in DWS Municipal Income on December 26, 2024 and sell it today you would earn a total of 13.00 from holding DWS Municipal Income or generate 1.41% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
DWS Municipal Income vs. Nuveen Credit Strategies
Performance |
Timeline |
DWS Municipal Income |
Nuveen Credit Strategies |
DWS Municipal and Nuveen Credit Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with DWS Municipal and Nuveen Credit
The main advantage of trading using opposite DWS Municipal and Nuveen Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DWS Municipal position performs unexpectedly, Nuveen Credit 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 Credit will offset losses from the drop in Nuveen Credit's long position.DWS Municipal vs. DTF Tax Free | DWS Municipal vs. Blackrock Muniyield Quality | DWS Municipal vs. Blackrock Muniholdings Quality | DWS Municipal vs. John Hancock Income |
Nuveen Credit vs. Blackrock Floating Rate | Nuveen Credit vs. BlackRock Floating Rate | Nuveen Credit vs. Nuveen Floating Rate | Nuveen Credit vs. Eaton Vance Senior |
Check out your portfolio center.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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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