Correlation Between Nebraska Municipal and Tiaa-cref High

Can any of the company-specific risk be diversified away by investing in both Nebraska Municipal and Tiaa-cref High 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 Nebraska Municipal and Tiaa-cref High into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Nebraska Municipal Fund and Tiaa Cref High Yield, you can compare the effects of market volatilities on Nebraska Municipal and Tiaa-cref High 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 Nebraska Municipal with a short position of Tiaa-cref High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nebraska Municipal and Tiaa-cref High.

Diversification Opportunities for Nebraska Municipal and Tiaa-cref High

0.38

Correlation Coefficient

Nebraska Municipal  Tiaa-cref High

Weak diversification

The 3 months correlation between Nebraska and Tiaa-cref is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Nebraska Municipal Fund and Tiaa Cref High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tiaa Cref High and Nebraska 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 Nebraska Municipal Fund are associated (or correlated) with Tiaa-cref High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tiaa Cref High has no effect on the direction of Nebraska Municipal i.e., Nebraska Municipal and Tiaa-cref High go up and down completely randomly.

Pair Corralation between Nebraska Municipal and Tiaa-cref High

Assuming the 90 days horizon Nebraska Municipal Fund is expected to under-perform the Tiaa-cref High. In addition to that, Nebraska Municipal is 1.13 times more volatile than Tiaa Cref High Yield. It trades about -0.02 of its total potential returns per unit of risk. Tiaa Cref High Yield is currently generating about 0.13 per unit of volatility. If you would invest  863.00  in Tiaa Cref High Yield on December 21, 2024 and sell it today you would earn a total of  15.00  from holding Tiaa Cref High Yield or generate 1.74% return on investment over 90 days.

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

Nebraska Municipal Fund  vs.  Tiaa Cref High Yield

Nebraska Municipal

Risk-Adjusted Performance

Very Weak

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

Tiaa Cref High

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tiaa Cref High Yield are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical indicators, Tiaa-cref High is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nebraska Municipal and Tiaa-cref High

The main advantage of trading using opposite Nebraska Municipal and Tiaa-cref High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nebraska Municipal position performs unexpectedly, Tiaa-cref High 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 Tiaa-cref High will offset losses from the drop in Tiaa-cref High's long position.

The idea behind Nebraska Municipal Fund and Tiaa Cref High Yield 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.