Correlation Between Nationwide Growth and Nationwide Global
Can any of the company-specific risk be diversified away by investing in both Nationwide Growth 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 Nationwide Growth and Nationwide Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide Growth Fund and Nationwide Global Equity, you can compare the effects of market volatilities on Nationwide Growth 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 Nationwide Growth with a short position of Nationwide Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Growth and Nationwide Global.
Diversification Opportunities for Nationwide Growth and Nationwide Global
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nationwide and Nationwide is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Growth 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 Nationwide Growth 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 Growth 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 Nationwide Growth i.e., Nationwide Growth and Nationwide Global go up and down completely randomly.
Pair Corralation between Nationwide Growth and Nationwide Global
Assuming the 90 days horizon Nationwide Growth Fund is expected to generate 1.01 times more return on investment than Nationwide Global. However, Nationwide Growth is 1.01 times more volatile than Nationwide Global Equity. It trades about 0.16 of its potential returns per unit of risk. Nationwide Global Equity is currently generating about 0.08 per unit of risk. If you would invest 1,434 in Nationwide Growth Fund on August 30, 2024 and sell it today you would earn a total of 41.00 from holding Nationwide Growth Fund or generate 2.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nationwide Growth Fund vs. Nationwide Global Equity
Performance |
| Timeline |
| Nationwide Growth |
| Nationwide Global Equity |
Nationwide Growth and Nationwide Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide Growth and Nationwide Global
The main advantage of trading using opposite Nationwide Growth and Nationwide Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Growth 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.| Nationwide Growth vs. Barings Active Short | Nationwide Growth vs. Astor Longshort Fund | Nationwide Growth vs. Ab Select Longshort | Nationwide Growth vs. Aqr Long Short Equity |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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