Correlation Between Nationwide Global and Ab Select
Can any of the company-specific risk be diversified away by investing in both Nationwide Global and Ab Select 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 Nationwide Global and Ab Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide Global Equity and Ab Select Longshort, you can compare the effects of market volatilities on Nationwide Global and Ab Select 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 Nationwide Global with a short position of Ab Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Global and Ab Select.
Diversification Opportunities for Nationwide Global and Ab Select
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nationwide and ASCLX is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Global Equity and Ab Select Longshort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Select Longshort and Nationwide 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 Nationwide Global Equity are associated (or correlated) with Ab Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Select Longshort has no effect on the direction of Nationwide Global i.e., Nationwide Global and Ab Select go up and down completely randomly.
Pair Corralation between Nationwide Global and Ab Select
Assuming the 90 days horizon Nationwide Global Equity is expected to generate 1.5 times more return on investment than Ab Select. However, Nationwide Global is 1.5 times more volatile than Ab Select Longshort. It trades about 0.07 of its potential returns per unit of risk. Ab Select Longshort is currently generating about 0.08 per unit of risk. If you would invest 1,753 in Nationwide Global Equity on December 2, 2024 and sell it today you would earn a total of 517.00 from holding Nationwide Global Equity or generate 29.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nationwide Global Equity vs. Ab Select Longshort
Performance |
| Timeline |
| Nationwide Global Equity |
| Ab Select Longshort |
Nationwide Global and Ab Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide Global and Ab Select
The main advantage of trading using opposite Nationwide Global and Ab Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Global position performs unexpectedly, Ab Select 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 Ab Select will offset losses from the drop in Ab Select's long position.| Nationwide Global vs. Advent Claymore Convertible | Nationwide Global vs. Franklin Vertible Securities | Nationwide Global vs. Virtus Convertible | Nationwide Global vs. The Gamco Global |
| Ab Select vs. Upright Assets Allocation | Ab Select vs. Morningstar Unconstrained Allocation | Ab Select vs. Gmo Asset Allocation | Ab Select vs. Hartford Moderate Allocation |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Stocks Directory Find actively traded stocks across global markets | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |