Correlation Between American Mutual and Nationwide Global
Can any of the company-specific risk be diversified away by investing in both American Mutual and Nationwide Global 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 Mutual and Nationwide Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between American Mutual Fund and Nationwide Global Equity, you can compare the effects of market volatilities on American Mutual and Nationwide Global 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 Mutual with a short position of Nationwide Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of American Mutual and Nationwide Global.
Diversification Opportunities for American Mutual and Nationwide Global
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between American and Nationwide is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding American Mutual Fund and Nationwide Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Global Equity and American Mutual 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 Mutual Fund are associated (or correlated) with Nationwide Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Global Equity has no effect on the direction of American Mutual i.e., American Mutual and Nationwide Global go up and down completely randomly.
Pair Corralation between American Mutual and Nationwide Global
Assuming the 90 days horizon American Mutual is expected to generate 1.3 times less return on investment than Nationwide Global. But when comparing it to its historical volatility, American Mutual Fund is 1.15 times less risky than Nationwide Global. It trades about 0.27 of its potential returns per unit of risk. Nationwide Global Equity is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2,371 in Nationwide Global Equity on September 1, 2024 and sell it today you would earn a total of 108.00 from holding Nationwide Global Equity or generate 4.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
American Mutual Fund vs. Nationwide Global Equity
Performance |
| Timeline |
| American Mutual |
| Nationwide Global Equity |
American Mutual and Nationwide Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with American Mutual and Nationwide Global
The main advantage of trading using opposite American Mutual and Nationwide Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if American Mutual position performs unexpectedly, Nationwide Global 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 Global will offset losses from the drop in Nationwide Global's long position.| American Mutual vs. Amcap Fund Class | American Mutual vs. American Balanced Fund | American Mutual vs. New Perspective Fund | American Mutual vs. New World Fund |
| Nationwide Global vs. Calvert Conservative Allocation | Nationwide Global vs. Adams Diversified Equity | Nationwide Global vs. Fidelity Advisor Diversified | Nationwide Global vs. Aqr Diversified Arbitrage |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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