Correlation Between Nuveen California and PUYI Old

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

By analyzing existing cross correlation between Nuveen California Select and PUYI Old, you can compare the effects of market volatilities on Nuveen California and PUYI Old 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 PUYI Old. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen California and PUYI Old.

Diversification Opportunities for Nuveen California and PUYI Old

-0.53

Correlation Coefficient

Nuveen California  PUYI Old

Excellent diversification

The 3 months correlation between Nuveen and PUYI is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen California Select and PUYI Old in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PUYI Old 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 Select are associated (or correlated) with PUYI Old. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PUYI Old has no effect on the direction of Nuveen California i.e., Nuveen California and PUYI Old go up and down completely randomly.

Pair Corralation between Nuveen California and PUYI Old

If you would invest  1,260  in Nuveen California Select on October 9, 2024 and sell it today you would earn a total of  44.00  from holding Nuveen California Select or generate 3.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	0.54%
Values	Daily Returns

Nuveen California Select  vs.  PUYI Old

Nuveen California Select

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen California Select has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Nuveen California is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

PUYI Old

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PUYI Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, PUYI Old is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Nuveen California and PUYI Old

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

The idea behind Nuveen California Select and PUYI Old 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.