Correlation Between Nuveen New and Invesco Pennsylvania

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

By analyzing existing cross correlation between Nuveen New York and Invesco Pennsylvania Value, you can compare the effects of market volatilities on Nuveen New and Invesco Pennsylvania 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 New with a short position of Invesco Pennsylvania. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen New and Invesco Pennsylvania.

Diversification Opportunities for Nuveen New and Invesco Pennsylvania

0.92

Correlation Coefficient

Nuveen New  Invesco Pennsylvania

Almost no diversification

The 3 months correlation between Nuveen and Invesco is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen New York and Invesco Pennsylvania Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Pennsylvania and Nuveen New 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 New York are associated (or correlated) with Invesco Pennsylvania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Pennsylvania has no effect on the direction of Nuveen New i.e., Nuveen New and Invesco Pennsylvania go up and down completely randomly.

Pair Corralation between Nuveen New and Invesco Pennsylvania

Considering the 90-day investment horizon Nuveen New York is expected to generate 0.66 times more return on investment than Invesco Pennsylvania. However, Nuveen New York is 1.52 times less risky than Invesco Pennsylvania. It trades about -0.52 of its potential returns per unit of risk. Invesco Pennsylvania Value is currently generating about -0.49 per unit of risk. If you would invest  1,088  in Nuveen New York on September 25, 2024 and sell it today you would lose (62.00) from holding Nuveen New York or give up 5.7% of portfolio value over 90 days.

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

Nuveen New York  vs.  Invesco Pennsylvania Value

Nuveen New York

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen New York has generated negative risk-adjusted returns adding no value to fund investors. Despite latest abnormal performance, the Fund's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the fund institutional investors.

Invesco Pennsylvania

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Invesco Pennsylvania Value has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Nuveen New and Invesco Pennsylvania

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

The idea behind Nuveen New York and Invesco Pennsylvania Value 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 Global Correlations module to find global opportunities by holding instruments from different markets.