Correlation Between Mutual Of and Nuveen All-american

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

By analyzing existing cross correlation between Mutual Of America and Nuveen All American Municipal, you can compare the effects of market volatilities on Mutual Of and Nuveen All-american 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 Mutual Of with a short position of Nuveen All-american. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mutual Of and Nuveen All-american.

Diversification Opportunities for Mutual Of and Nuveen All-american

0.5

Correlation Coefficient

Mutual Of  Nuveen All-american

Very weak diversification

The 3 months correlation between Mutual and Nuveen is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Mutual Of America and Nuveen All American Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen All American and Mutual Of 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 Mutual Of America are associated (or correlated) with Nuveen All-american. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen All American has no effect on the direction of Mutual Of i.e., Mutual Of and Nuveen All-american go up and down completely randomly.

Pair Corralation between Mutual Of and Nuveen All-american

Assuming the 90 days horizon Mutual Of America is expected to under-perform the Nuveen All-american. In addition to that, Mutual Of is 4.94 times more volatile than Nuveen All American Municipal. It trades about -0.24 of its total potential returns per unit of risk. Nuveen All American Municipal is currently generating about 0.14 per unit of volatility. If you would invest  1,015  in Nuveen All American Municipal on December 4, 2024 and sell it today you would earn a total of  6.00  from holding Nuveen All American Municipal or generate 0.59% return on investment over 90 days.

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

Mutual Of America  vs.  Nuveen All American Municipal

Mutual Of America

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mutual Of America has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward-looking signals remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Nuveen All American

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Mutual Of and Nuveen All-american

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

The idea behind Mutual Of America and Nuveen All American 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.

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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..