Correlation Between Global Gold and Nationwide
Can any of the company-specific risk be diversified away by investing in both Global Gold and Nationwide 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 Global Gold and Nationwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Gold Fund and Nationwide E Plus, you can compare the effects of market volatilities on Global Gold and Nationwide 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 Global Gold with a short position of Nationwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Gold and Nationwide.
Diversification Opportunities for Global Gold and Nationwide
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Global and Nationwide is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Global Gold Fund and Nationwide E Plus in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide E Plus and Global Gold 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 Global Gold Fund are associated (or correlated) with Nationwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide E Plus has no effect on the direction of Global Gold i.e., Global Gold and Nationwide go up and down completely randomly.
Pair Corralation between Global Gold and Nationwide
Assuming the 90 days horizon Global Gold Fund is expected to generate 4.06 times more return on investment than Nationwide. However, Global Gold is 4.06 times more volatile than Nationwide E Plus. It trades about 0.14 of its potential returns per unit of risk. Nationwide E Plus is currently generating about -0.18 per unit of risk. If you would invest 1,332 in Global Gold Fund on September 12, 2024 and sell it today you would earn a total of 72.00 from holding Global Gold Fund or generate 5.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Gold Fund vs. Nationwide E Plus
Performance |
| Timeline |
| Global Gold Fund |
| Nationwide E Plus |
Global Gold and Nationwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Gold and Nationwide
The main advantage of trading using opposite Global Gold and Nationwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Gold position performs unexpectedly, Nationwide 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 will offset losses from the drop in Nationwide's long position.| Global Gold vs. Sa Worldwide Moderate | Global Gold vs. Putnman Retirement Ready | Global Gold vs. Pro Blend Moderate Term | Global Gold vs. Franklin Lifesmart Retirement |
| Nationwide vs. Queens Road Small | Nationwide vs. Applied Finance Explorer | Nationwide vs. Victory Rs Partners | Nationwide vs. Lsv Small Cap |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Transaction History View history of all your transactions and understand their impact on performance |