Correlation Between Nationwide Global and Catalystmillburn
Can any of the company-specific risk be diversified away by investing in both Nationwide Global and Catalystmillburn 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 Catalystmillburn 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 Catalystmillburn Hedge Strategy, you can compare the effects of market volatilities on Nationwide Global and Catalystmillburn 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 Catalystmillburn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Global and Catalystmillburn.
Diversification Opportunities for Nationwide Global and Catalystmillburn
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nationwide and Catalystmillburn is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Global Equity and Catalystmillburn Hedge Strateg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalystmillburn Hedge 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 Catalystmillburn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalystmillburn Hedge has no effect on the direction of Nationwide Global i.e., Nationwide Global and Catalystmillburn go up and down completely randomly.
Pair Corralation between Nationwide Global and Catalystmillburn
Assuming the 90 days horizon Nationwide Global Equity is expected to generate 2.29 times more return on investment than Catalystmillburn. However, Nationwide Global is 2.29 times more volatile than Catalystmillburn Hedge Strategy. It trades about 0.12 of its potential returns per unit of risk. Catalystmillburn Hedge Strategy is currently generating about 0.16 per unit of risk. If you would invest 2,444 in Nationwide Global Equity on September 13, 2024 and sell it today you would earn a total of 41.00 from holding Nationwide Global Equity or generate 1.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nationwide Global Equity vs. Catalystmillburn Hedge Strateg
Performance |
| Timeline |
| Nationwide Global Equity |
| Catalystmillburn Hedge |
Nationwide Global and Catalystmillburn Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide Global and Catalystmillburn
The main advantage of trading using opposite Nationwide Global and Catalystmillburn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Global position performs unexpectedly, Catalystmillburn 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 Catalystmillburn will offset losses from the drop in Catalystmillburn's long position.| Nationwide Global vs. Transamerica Intermediate Muni | Nationwide Global vs. Oklahoma Municipal Fund | Nationwide Global vs. Old Westbury Municipal | Nationwide Global vs. T Rowe Price |
| Catalystmillburn vs. Extended Market Index | Catalystmillburn vs. Ashmore Emerging Markets | Catalystmillburn vs. Ep Emerging Markets | Catalystmillburn vs. Transamerica Emerging Markets |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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