Correlation Between Nationwide International and Nationwide Growth
Can any of the company-specific risk be diversified away by investing in both Nationwide International 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 Nationwide International and Nationwide Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide International Index and Nationwide Growth Fund, you can compare the effects of market volatilities on Nationwide International 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 Nationwide International with a short position of Nationwide Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide International and Nationwide Growth.
Diversification Opportunities for Nationwide International and Nationwide Growth
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nationwide and Nationwide is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide International Index and Nationwide Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Growth and Nationwide International 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 International Index 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 Nationwide International i.e., Nationwide International and Nationwide Growth go up and down completely randomly.
Pair Corralation between Nationwide International and Nationwide Growth
Assuming the 90 days horizon Nationwide International Index is expected to under-perform the Nationwide Growth. In addition to that, Nationwide International is 1.24 times more volatile than Nationwide Growth Fund. It trades about -0.08 of its total potential returns per unit of risk. Nationwide Growth Fund is currently generating about 0.36 per unit of volatility. If you would invest 1,404 in Nationwide Growth Fund on September 1, 2024 and sell it today you would earn a total of 80.00 from holding Nationwide Growth Fund or generate 5.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nationwide International Index vs. Nationwide Growth Fund
Performance |
| Timeline |
| Nationwide International |
| Nationwide Growth |
Nationwide International and Nationwide Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide International and Nationwide Growth
The main advantage of trading using opposite Nationwide International and Nationwide Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide International 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.| Nationwide International vs. Pgim Jennison Diversified | Nationwide International vs. Small Cap Stock | Nationwide International vs. Sentinel Small Pany | Nationwide International vs. Lord Abbett Diversified |
| Nationwide Growth vs. Sentinel Small Pany | Nationwide Growth vs. T Rowe Price | Nationwide Growth vs. The Gabelli Small | Nationwide Growth vs. Oppenheimer International Diversified |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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