Correlation Between Nuveen Strategic and American Funds
Can any of the company-specific risk be diversified away by investing in both Nuveen Strategic and American Funds 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 Strategic and American Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Strategic Municipal and American Funds American, you can compare the effects of market volatilities on Nuveen Strategic and American Funds 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 Strategic with a short position of American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Strategic and American Funds.
Diversification Opportunities for Nuveen Strategic and American Funds
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nuveen and American is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Strategic Municipal and American Funds American in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds American and Nuveen Strategic 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 Strategic Municipal are associated (or correlated) with American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds American has no effect on the direction of Nuveen Strategic i.e., Nuveen Strategic and American Funds go up and down completely randomly.
Pair Corralation between Nuveen Strategic and American Funds
Assuming the 90 days horizon Nuveen Strategic is expected to generate 2.14 times less return on investment than American Funds. But when comparing it to its historical volatility, Nuveen Strategic Municipal is 2.82 times less risky than American Funds. It trades about 0.08 of its potential returns per unit of risk. American Funds American is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 3,146 in American Funds American on October 9, 2024 and sell it today you would earn a total of 313.00 from holding American Funds American or generate 9.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Nuveen Strategic Municipal vs. American Funds American
Performance |
Timeline |
Nuveen Strategic Mun |
American Funds American |
Nuveen Strategic and American Funds Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nuveen Strategic and American Funds
The main advantage of trading using opposite Nuveen Strategic and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Strategic position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' long position.Nuveen Strategic vs. Alphacentric Lifesci Healthcare | Nuveen Strategic vs. Allianzgi Health Sciences | Nuveen Strategic vs. Invesco Global Health | Nuveen Strategic vs. Hartford Healthcare Hls |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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