Correlation Between Nuveen California and Allianzgi Nfj

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

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

Diversification Opportunities for Nuveen California and Allianzgi Nfj

0.35

Correlation Coefficient

Nuveen California  Allianzgi Nfj

Weak diversification

The 3 months correlation between Nuveen and Allianzgi is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen California Municipal and Allianzgi Nfj International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allianzgi Nfj Intern and Nuveen California 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 California Municipal are associated (or correlated) with Allianzgi Nfj. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allianzgi Nfj Intern has no effect on the direction of Nuveen California i.e., Nuveen California and Allianzgi Nfj go up and down completely randomly.

Pair Corralation between Nuveen California and Allianzgi Nfj

Assuming the 90 days horizon Nuveen California Municipal is expected to under-perform the Allianzgi Nfj. But the mutual fund apears to be less risky and, when comparing its historical volatility, Nuveen California Municipal is 2.99 times less risky than Allianzgi Nfj. The mutual fund trades about -0.05 of its potential returns per unit of risk. The Allianzgi Nfj International is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,841  in Allianzgi Nfj International on October 23, 2024 and sell it today you would earn a total of  19.00  from holding Allianzgi Nfj International or generate 1.03% return on investment over 90 days.

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

Nuveen California Municipal  vs.  Allianzgi Nfj International

Nuveen California

Risk-Adjusted Performance

0 of 100

Very Weak

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

Allianzgi Nfj Intern

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Allianzgi Nfj International has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Allianzgi Nfj 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 California and Allianzgi Nfj

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

The idea behind Nuveen California Municipal and Allianzgi Nfj International 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 Transaction History module to view history of all your transactions and understand their impact on performance.