Correlation Between Markel Corp and Nationwide Building
Can any of the company-specific risk be diversified away by investing in both Markel Corp and Nationwide Building 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 Markel Corp and Nationwide Building into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Markel Corp and Nationwide Building Society, you can compare the effects of market volatilities on Markel Corp and Nationwide Building 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 Markel Corp with a short position of Nationwide Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Markel Corp and Nationwide Building.
Diversification Opportunities for Markel Corp and Nationwide Building
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Markel and Nationwide is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Markel Corp and Nationwide Building Society in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Building and Markel Corp 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 Markel Corp are associated (or correlated) with Nationwide Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Building has no effect on the direction of Markel Corp i.e., Markel Corp and Nationwide Building go up and down completely randomly.
Pair Corralation between Markel Corp and Nationwide Building
Assuming the 90 days trading horizon Markel Corp is expected to generate 8.91 times more return on investment than Nationwide Building. However, Markel Corp is 8.91 times more volatile than Nationwide Building Society. It trades about 0.07 of its potential returns per unit of risk. Nationwide Building Society is currently generating about 0.33 per unit of risk. If you would invest 183,164 in Markel Corp on November 28, 2024 and sell it today you would earn a total of 5,798 from holding Markel Corp or generate 3.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Markel Corp vs. Nationwide Building Society
Performance |
| Timeline |
| Markel Corp |
| Nationwide Building |
Markel Corp and Nationwide Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Markel Corp and Nationwide Building
The main advantage of trading using opposite Markel Corp and Nationwide Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Markel Corp position performs unexpectedly, Nationwide Building 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 Nationwide Building will offset losses from the drop in Nationwide Building's long position.| Markel Corp vs. BlackRock Frontiers Investment | Markel Corp vs. Aberdeen Diversified Income | Markel Corp vs. EJF Investments | Markel Corp vs. Lowland Investment Co |
| Nationwide Building vs. British American Tobacco | Nationwide Building vs. GlobalData PLC | Nationwide Building vs. Rosslyn Data Technologies | Nationwide Building vs. BW Offshore |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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