Correlation Between Nuveen Kansas and Nuveen Winslow

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

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

Diversification Opportunities for Nuveen Kansas and Nuveen Winslow

-0.65

Correlation Coefficient

Nuveen Kansas  Nuveen Winslow

Excellent diversification

The 3 months correlation between Nuveen and Nuveen is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Kansas Municipal and Nuveen Winslow Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Winslow Large and Nuveen Kansas 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 Kansas Municipal are associated (or correlated) with Nuveen Winslow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Winslow Large has no effect on the direction of Nuveen Kansas i.e., Nuveen Kansas and Nuveen Winslow go up and down completely randomly.

Pair Corralation between Nuveen Kansas and Nuveen Winslow

Assuming the 90 days horizon Nuveen Kansas Municipal is expected to under-perform the Nuveen Winslow. But the mutual fund apears to be less risky and, when comparing its historical volatility, Nuveen Kansas Municipal is 4.3 times less risky than Nuveen Winslow. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Nuveen Winslow Large Cap is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  5,815  in Nuveen Winslow Large Cap on September 2, 2024 and sell it today you would earn a total of  670.00  from holding Nuveen Winslow Large Cap or generate 11.52% return on investment over 90 days.

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

Nuveen Kansas Municipal  vs.  Nuveen Winslow Large Cap

Nuveen Kansas Municipal

Risk-Adjusted Performance

0 of 100

Very Weak

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

Nuveen Winslow Large

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Winslow Large Cap are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Nuveen Winslow may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Nuveen Kansas and Nuveen Winslow

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

The idea behind Nuveen Kansas Municipal and Nuveen Winslow Large Cap 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.