Correlation Between Principal Lifetime and Nuveen Strategic

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

By analyzing existing cross correlation between Principal Lifetime 2030 and Nuveen Strategic Municipal, you can compare the effects of market volatilities on Principal Lifetime and Nuveen Strategic 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 Principal Lifetime with a short position of Nuveen Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Principal Lifetime and Nuveen Strategic.

Diversification Opportunities for Principal Lifetime and Nuveen Strategic

0.0

Correlation Coefficient

Principal Lifetime  Nuveen Strategic

Pay attention - limited upside

The 3 months correlation between Principal and Nuveen is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Principal Lifetime 2030 and Nuveen Strategic Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Strategic Mun and Principal Lifetime 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 Principal Lifetime 2030 are associated (or correlated) with Nuveen Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Strategic Mun has no effect on the direction of Principal Lifetime i.e., Principal Lifetime and Nuveen Strategic go up and down completely randomly.

Pair Corralation between Principal Lifetime and Nuveen Strategic

If you would invest  984.00  in Nuveen Strategic Municipal on December 21, 2024 and sell it today you would earn a total of  13.00  from holding Nuveen Strategic Municipal or generate 1.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Principal Lifetime 2030  vs.  Nuveen Strategic Municipal

Principal Lifetime 2030

Risk-Adjusted Performance

Very Weak

Over the last 90 days Principal Lifetime 2030 has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Principal Lifetime is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nuveen Strategic Mun

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Strategic Municipal are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Nuveen Strategic is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Principal Lifetime and Nuveen Strategic

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

The idea behind Principal Lifetime 2030 and Nuveen Strategic Municipal 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 Commodity Directory module to find actively traded commodities issued by global exchanges.