Correlation Between Macquariefirst and Nuveen Amt

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

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

Diversification Opportunities for Macquariefirst and Nuveen Amt

0.81

Correlation Coefficient

Macquariefirst  Nuveen Amt

Very poor diversification

The 3 months correlation between Macquariefirst and Nuveen is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Macquariefirst Tr Global and Nuveen Amt Free Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Amt Free and Macquariefirst 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 Macquariefirst Tr Global are associated (or correlated) with Nuveen Amt. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Amt Free has no effect on the direction of Macquariefirst i.e., Macquariefirst and Nuveen Amt go up and down completely randomly.

Pair Corralation between Macquariefirst and Nuveen Amt

Considering the 90-day investment horizon Macquariefirst is expected to generate 3.01 times less return on investment than Nuveen Amt. In addition to that, Macquariefirst is 2.0 times more volatile than Nuveen Amt Free Municipal. It trades about 0.02 of its total potential returns per unit of risk. Nuveen Amt Free Municipal is currently generating about 0.12 per unit of volatility. If you would invest  1,084  in Nuveen Amt Free Municipal on March 14, 2024 and sell it today you would earn a total of  41.00  from holding Nuveen Amt Free Municipal or generate 3.78% return on investment over 90 days.

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

Macquariefirst Tr Global  vs.  Nuveen Amt Free Municipal

Macquariefirst Tr Global

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Macquariefirst Tr Global are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather sound technical and fundamental indicators, Macquariefirst is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Nuveen Amt Free

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nuveen Amt Free Municipal are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong technical and fundamental indicators, Nuveen Amt is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Macquariefirst and Nuveen Amt

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

The idea behind Macquariefirst Tr Global and Nuveen Amt Free Municipal 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.