Correlation Between Nuveen Missouri and Gabelli Equity

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

By analyzing existing cross correlation between Nuveen Missouri Quality and The Gabelli Equity, you can compare the effects of market volatilities on Nuveen Missouri and Gabelli Equity 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 Missouri with a short position of Gabelli Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Missouri and Gabelli Equity.

Diversification Opportunities for Nuveen Missouri and Gabelli Equity

-0.8

Correlation Coefficient

Nuveen Missouri  Gabelli Equity

Pay attention - limited upside

The 3 months correlation between Nuveen and Gabelli is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Missouri Quality and The Gabelli Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Equity and Nuveen Missouri 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 Missouri Quality are associated (or correlated) with Gabelli Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Equity has no effect on the direction of Nuveen Missouri i.e., Nuveen Missouri and Gabelli Equity go up and down completely randomly.

Pair Corralation between Nuveen Missouri and Gabelli Equity

Considering the 90-day investment horizon Nuveen Missouri Quality is expected to generate 1.88 times more return on investment than Gabelli Equity. However, Nuveen Missouri is 1.88 times more volatile than The Gabelli Equity. It trades about 0.11 of its potential returns per unit of risk. The Gabelli Equity is currently generating about -0.17 per unit of risk. If you would invest  1,077  in Nuveen Missouri Quality on October 10, 2024 and sell it today you would earn a total of  113.00  from holding Nuveen Missouri Quality or generate 10.49% return on investment over 90 days.

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

Nuveen Missouri Quality  vs.  The Gabelli Equity

Nuveen Missouri Quality

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Missouri Quality are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of very weak basic indicators, Nuveen Missouri may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Gabelli Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Gabelli Equity has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Preferred Stock's fundamental drivers remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Nuveen Missouri and Gabelli Equity

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

The idea behind Nuveen Missouri Quality and The Gabelli Equity 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.