Correlation Between Munivest Fund and Nuveen California

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

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

Diversification Opportunities for Munivest Fund and Nuveen California

0.57

Correlation Coefficient

Munivest Fund  Nuveen California

Very weak diversification

The 3 months correlation between Munivest and Nuveen is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Munivest Fund and Nuveen California Amt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen California Amt and Munivest Fund 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 Munivest Fund 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 Amt has no effect on the direction of Munivest Fund i.e., Munivest Fund and Nuveen California go up and down completely randomly.

Pair Corralation between Munivest Fund and Nuveen California

Considering the 90-day investment horizon Munivest Fund is expected to generate 0.83 times more return on investment than Nuveen California. However, Munivest Fund is 1.2 times less risky than Nuveen California. It trades about 0.07 of its potential returns per unit of risk. Nuveen California Amt is currently generating about -0.03 per unit of risk. If you would invest  733.00  in Munivest Fund on September 4, 2024 and sell it today you would earn a total of  22.00  from holding Munivest Fund or generate 3.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Munivest Fund  vs.  Nuveen California Amt

Munivest Fund

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Munivest Fund are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. Despite nearly stable basic indicators, Munivest Fund is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Nuveen California Amt

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Munivest Fund and Nuveen California

The main advantage of trading using opposite Munivest Fund and Nuveen California positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Munivest Fund 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 Munivest Fund and Nuveen California Amt 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.