Correlation Between Nuveen Dividend and Nuveen Select
Can any of the company-specific risk be diversified away by investing in both Nuveen Dividend and Nuveen Select 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 Dividend and Nuveen Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Dividend Advantage and Nuveen Select Tax Free, you can compare the effects of market volatilities on Nuveen Dividend and Nuveen Select 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 Dividend with a short position of Nuveen Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Dividend and Nuveen Select.
Diversification Opportunities for Nuveen Dividend and Nuveen Select
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nuveen and Nuveen is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Dividend Advantage and Nuveen Select Tax Free in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Select Tax and Nuveen Dividend 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 Dividend Advantage are associated (or correlated) with Nuveen Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Select Tax has no effect on the direction of Nuveen Dividend i.e., Nuveen Dividend and Nuveen Select go up and down completely randomly.
Pair Corralation between Nuveen Dividend and Nuveen Select
Considering the 90-day investment horizon Nuveen Dividend Advantage is expected to generate 0.61 times more return on investment than Nuveen Select. However, Nuveen Dividend Advantage is 1.63 times less risky than Nuveen Select. It trades about 0.27 of its potential returns per unit of risk. Nuveen Select Tax Free is currently generating about -0.05 per unit of risk. If you would invest 1,168 in Nuveen Dividend Advantage on December 4, 2024 and sell it today you would earn a total of 26.00 from holding Nuveen Dividend Advantage or generate 2.23% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Nuveen Dividend Advantage vs. Nuveen Select Tax Free
Performance |
Timeline |
Nuveen Dividend Advantage |
Nuveen Select Tax |
Nuveen Dividend and Nuveen Select Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nuveen Dividend and Nuveen Select
The main advantage of trading using opposite Nuveen Dividend and Nuveen Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Dividend position performs unexpectedly, Nuveen Select 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 Select will offset losses from the drop in Nuveen Select's long position.Nuveen Dividend vs. Nuveen Amt Free | Nuveen Dividend vs. Nuveen Municipal Credit | Nuveen Dividend vs. Nuveen Municipal Value | Nuveen Dividend vs. Nuveen Municipal High |
Nuveen Select vs. Nuveen Dividend Advantage | Nuveen Select vs. Nuveen Amt Free Municipal | Nuveen Select vs. Nuveen Municipal Credit | Nuveen Select vs. Nuveen Amt Free |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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