Correlation Between Massachusetts Investors and Nuveen Municipal

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

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

Diversification Opportunities for Massachusetts Investors and Nuveen Municipal

0.35

Correlation Coefficient

Massachusetts Investors  Nuveen Municipal

Weak diversification

The 3 months correlation between Massachusetts and Nuveen is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Massachusetts Investors Trust and Nuveen Municipal High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Municipal High and Massachusetts Investors 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 Massachusetts Investors Trust are associated (or correlated) with Nuveen Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Municipal High has no effect on the direction of Massachusetts Investors i.e., Massachusetts Investors and Nuveen Municipal go up and down completely randomly.

Pair Corralation between Massachusetts Investors and Nuveen Municipal

If you would invest  0.00  in Massachusetts Investors Trust on October 1, 2024 and sell it today you would earn a total of  0.00  from holding Massachusetts Investors Trust or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	5.0%
Values	Daily Returns

Massachusetts Investors Trust  vs.  Nuveen Municipal High

Massachusetts Investors

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Massachusetts Investors Trust has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Nuveen Municipal High

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Massachusetts Investors and Nuveen Municipal

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

The idea behind Massachusetts Investors Trust and Nuveen Municipal High 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.