Correlation Between Cutler Equity and Nationwide International
Can any of the company-specific risk be diversified away by investing in both Cutler Equity and Nationwide International 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 Cutler Equity and Nationwide International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cutler Equity and Nationwide International Index, you can compare the effects of market volatilities on Cutler Equity and Nationwide International 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 Cutler Equity with a short position of Nationwide International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cutler Equity and Nationwide International.
Diversification Opportunities for Cutler Equity and Nationwide International
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Cutler and Nationwide is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Cutler Equity and Nationwide International Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide International and Cutler Equity 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 Cutler Equity are associated (or correlated) with Nationwide International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide International has no effect on the direction of Cutler Equity i.e., Cutler Equity and Nationwide International go up and down completely randomly.
Pair Corralation between Cutler Equity and Nationwide International
Assuming the 90 days horizon Cutler Equity is expected to under-perform the Nationwide International. But the mutual fund apears to be less risky and, when comparing its historical volatility, Cutler Equity is 1.6 times less risky than Nationwide International. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Nationwide International Index is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 897.00 in Nationwide International Index on November 28, 2024 and sell it today you would earn a total of 35.00 from holding Nationwide International Index or generate 3.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cutler Equity vs. Nationwide International Index
Performance |
| Timeline |
| Cutler Equity |
| Nationwide International |
Cutler Equity and Nationwide International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cutler Equity and Nationwide International
The main advantage of trading using opposite Cutler Equity and Nationwide International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cutler Equity position performs unexpectedly, Nationwide International 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 International will offset losses from the drop in Nationwide International's long position.| Cutler Equity vs. Baron Health Care | Cutler Equity vs. Eventide Healthcare Life | Cutler Equity vs. Blackrock Health Sciences | Cutler Equity vs. Highland Longshort Healthcare |
| Nationwide International vs. Fidelity Flex Servative | Nationwide International vs. Old Westbury Short Term | Nationwide International vs. Siit Ultra Short | Nationwide International vs. Alpine Ultra Short |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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