Correlation Between Ridgeworth Innovative and Nuveen California

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

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

Diversification Opportunities for Ridgeworth Innovative and Nuveen California

-0.6

Correlation Coefficient

Ridgeworth Innovative  Nuveen California

Excellent diversification

The 3 months correlation between Ridgeworth and Nuveen is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Ridgeworth Innovative Growth and Nuveen California Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen California and Ridgeworth Innovative 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 Ridgeworth Innovative Growth are associated (or correlated) with Nuveen California. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen California has no effect on the direction of Ridgeworth Innovative i.e., Ridgeworth Innovative and Nuveen California go up and down completely randomly.

Pair Corralation between Ridgeworth Innovative and Nuveen California

Assuming the 90 days horizon Ridgeworth Innovative Growth is expected to under-perform the Nuveen California. In addition to that, Ridgeworth Innovative is 4.45 times more volatile than Nuveen California Municipal. It trades about -0.12 of its total potential returns per unit of risk. Nuveen California Municipal is currently generating about 0.13 per unit of volatility. If you would invest  832.00  in Nuveen California Municipal on December 30, 2024 and sell it today you would earn a total of  31.00  from holding Nuveen California Municipal or generate 3.73% return on investment over 90 days.

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

Ridgeworth Innovative Growth  vs.  Nuveen California Municipal

Ridgeworth Innovative

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ridgeworth Innovative Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Nuveen California

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen California Municipal are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong fundamental indicators, Nuveen California is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ridgeworth Innovative and Nuveen California

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

The idea behind Ridgeworth Innovative Growth and Nuveen California 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.

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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.