Correlation Between American High and Nuveen High
Can any of the company-specific risk be diversified away by investing in both American High and Nuveen High 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 American High and Nuveen High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American High Income Municipal and Nuveen High Yield, you can compare the effects of market volatilities on American High and Nuveen High 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 American High with a short position of Nuveen High. Check out your portfolio center. Please also check ongoing floating volatility patterns of American High and Nuveen High.
Diversification Opportunities for American High and Nuveen High
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between American and Nuveen is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding American High Income Municipal and Nuveen High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen High Yield and American High 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 American High Income Municipal are associated (or correlated) with Nuveen High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen High Yield has no effect on the direction of American High i.e., American High and Nuveen High go up and down completely randomly.
Pair Corralation between American High and Nuveen High
Assuming the 90 days horizon American High Income Municipal is expected to generate 0.7 times more return on investment than Nuveen High. However, American High Income Municipal is 1.43 times less risky than Nuveen High. It trades about -0.24 of its potential returns per unit of risk. Nuveen High Yield is currently generating about -0.23 per unit of risk. If you would invest 1,503 in American High Income Municipal on January 20, 2024 and sell it today you would lose (18.00) from holding American High Income Municipal or give up 1.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
American High Income Municipal vs. Nuveen High Yield
Performance |
| Timeline |
| American High Me |
| Nuveen High Yield |
American High and Nuveen High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American High and Nuveen High
The main advantage of trading using opposite American High and Nuveen High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American High position performs unexpectedly, Nuveen High 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 High will offset losses from the drop in Nuveen High's long position.| American High vs. Income Fund Of | American High vs. New World Fund | American High vs. American Mutual Fund | American High vs. American Mutual Fund |
| Nuveen High vs. Oppenheimer Rochester High | Nuveen High vs. Oppenheimer Rochester Amt Free | Nuveen High vs. Nuveen All American Municipal | Nuveen High vs. Invesco High Yield |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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