Correlation Between Federated Global and Nationwide Growth
Can any of the company-specific risk be diversified away by investing in both Federated Global and Nationwide Growth 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 Federated Global and Nationwide Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated Global Allocation and Nationwide Growth Fund, you can compare the effects of market volatilities on Federated Global and Nationwide Growth 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 Federated Global with a short position of Nationwide Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated Global and Nationwide Growth.
Diversification Opportunities for Federated Global and Nationwide Growth
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FEDERATED and Nationwide is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Federated Global Allocation and Nationwide Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Growth and Federated Global 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 Federated Global Allocation are associated (or correlated) with Nationwide Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Growth has no effect on the direction of Federated Global i.e., Federated Global and Nationwide Growth go up and down completely randomly.
Pair Corralation between Federated Global and Nationwide Growth
Assuming the 90 days horizon Federated Global is expected to generate 2.52 times less return on investment than Nationwide Growth. But when comparing it to its historical volatility, Federated Global Allocation is 1.53 times less risky than Nationwide Growth. It trades about 0.06 of its potential returns per unit of risk. Nationwide Growth Fund is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,027 in Nationwide Growth Fund on October 9, 2024 and sell it today you would earn a total of 456.00 from holding Nationwide Growth Fund or generate 44.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated Global Allocation vs. Nationwide Growth Fund
Performance |
| Timeline |
| Federated Global All |
| Nationwide Growth |
Federated Global and Nationwide Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated Global and Nationwide Growth
The main advantage of trading using opposite Federated Global and Nationwide Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated Global position performs unexpectedly, Nationwide Growth 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 Growth will offset losses from the drop in Nationwide Growth's long position.| Federated Global vs. Federated Bond Fund | Federated Global vs. Aquagold International | Federated Global vs. Thrivent High Yield | Federated Global vs. Morningstar Unconstrained Allocation |
| Nationwide Growth vs. Alpine Ultra Short | Nationwide Growth vs. Gurtin California Muni | Nationwide Growth vs. Virtus Seix Government | Nationwide Growth vs. Dws Government Money |
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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