Correlation Between SPDR Nuveen and VanEck Intermediate

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

By analyzing existing cross correlation between SPDR Nuveen Bloomberg and VanEck Intermediate Muni, you can compare the effects of market volatilities on SPDR Nuveen and VanEck Intermediate 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 SPDR Nuveen with a short position of VanEck Intermediate. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPDR Nuveen and VanEck Intermediate.

Diversification Opportunities for SPDR Nuveen and VanEck Intermediate

0.97

Correlation Coefficient

SPDR Nuveen  VanEck Intermediate

Almost no diversification

The 3 months correlation between SPDR and VanEck is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding SPDR Nuveen Bloomberg and VanEck Intermediate Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Intermediate Muni and SPDR Nuveen 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 SPDR Nuveen Bloomberg are associated (or correlated) with VanEck Intermediate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Intermediate Muni has no effect on the direction of SPDR Nuveen i.e., SPDR Nuveen and VanEck Intermediate go up and down completely randomly.

Pair Corralation between SPDR Nuveen and VanEck Intermediate

Considering the 90-day investment horizon SPDR Nuveen Bloomberg is expected to generate 0.99 times more return on investment than VanEck Intermediate. However, SPDR Nuveen Bloomberg is 1.01 times less risky than VanEck Intermediate. It trades about -0.04 of its potential returns per unit of risk. VanEck Intermediate Muni is currently generating about -0.06 per unit of risk. If you would invest  4,523  in SPDR Nuveen Bloomberg on December 27, 2024 and sell it today you would lose (29.00) from holding SPDR Nuveen Bloomberg or give up 0.64% of portfolio value over 90 days.

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

SPDR Nuveen Bloomberg  vs.  VanEck Intermediate Muni

SPDR Nuveen Bloomberg

Risk-Adjusted Performance

Very Weak

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

VanEck Intermediate Muni

Risk-Adjusted Performance

Very Weak

Over the last 90 days VanEck Intermediate Muni has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, VanEck Intermediate is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with SPDR Nuveen and VanEck Intermediate

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

The idea behind SPDR Nuveen Bloomberg and VanEck Intermediate Muni 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.