Correlation Between Nuveen Strategic and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Nuveen Strategic and Emerging Markets 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 Emerging Markets 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 Emerging Markets Portfolio, you can compare the effects of market volatilities on Nuveen Strategic and Emerging Markets 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 Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Strategic and Emerging Markets.
Diversification Opportunities for Nuveen Strategic and Emerging Markets
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nuveen and Emerging is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Strategic Municipal and Emerging Markets Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Por 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 Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Por has no effect on the direction of Nuveen Strategic i.e., Nuveen Strategic and Emerging Markets go up and down completely randomly.
Pair Corralation between Nuveen Strategic and Emerging Markets
Assuming the 90 days horizon Nuveen Strategic Municipal is expected to under-perform the Emerging Markets. But the mutual fund apears to be less risky and, when comparing its historical volatility, Nuveen Strategic Municipal is 2.78 times less risky than Emerging Markets. The mutual fund trades about -0.24 of its potential returns per unit of risk. The Emerging Markets Portfolio is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 2,339 in Emerging Markets Portfolio on April 25, 2025 and sell it today you would earn a total of 87.00 from holding Emerging Markets Portfolio or generate 3.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Nuveen Strategic Municipal vs. Emerging Markets Portfolio
Performance |
Timeline |
Nuveen Strategic Mun |
Emerging Markets Por |
Nuveen Strategic and Emerging Markets Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nuveen Strategic and Emerging Markets
The main advantage of trading using opposite Nuveen Strategic and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Strategic position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.Nuveen Strategic vs. Balanced Fund Retail | Nuveen Strategic vs. Fbanjx | Nuveen Strategic vs. Volumetric Fund Volumetric | Nuveen Strategic vs. Tax Managed Large Cap |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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