Correlation Between Nationwide Mid and Frost Kempner
Can any of the company-specific risk be diversified away by investing in both Nationwide Mid and Frost Kempner 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 Mid and Frost Kempner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide Mid Cap and Frost Kempner Multi Cap, you can compare the effects of market volatilities on Nationwide Mid and Frost Kempner 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 Mid with a short position of Frost Kempner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Mid and Frost Kempner.
Diversification Opportunities for Nationwide Mid and Frost Kempner
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nationwide and Frost is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Mid Cap and Frost Kempner Multi Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frost Kempner Multi and Nationwide Mid 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 Mid Cap are associated (or correlated) with Frost Kempner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frost Kempner Multi has no effect on the direction of Nationwide Mid i.e., Nationwide Mid and Frost Kempner go up and down completely randomly.
Pair Corralation between Nationwide Mid and Frost Kempner
Assuming the 90 days horizon Nationwide Mid Cap is expected to generate 1.62 times more return on investment than Frost Kempner. However, Nationwide Mid is 1.62 times more volatile than Frost Kempner Multi Cap. It trades about 0.31 of its potential returns per unit of risk. Frost Kempner Multi Cap is currently generating about 0.24 per unit of risk. If you would invest 1,811 in Nationwide Mid Cap on September 4, 2024 and sell it today you would earn a total of 145.00 from holding Nationwide Mid Cap or generate 8.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nationwide Mid Cap vs. Frost Kempner Multi Cap
Performance |
| Timeline |
| Nationwide Mid Cap |
| Frost Kempner Multi |
Nationwide Mid and Frost Kempner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide Mid and Frost Kempner
The main advantage of trading using opposite Nationwide Mid and Frost Kempner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Mid position performs unexpectedly, Frost Kempner 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 Frost Kempner will offset losses from the drop in Frost Kempner's long position.| Nationwide Mid vs. Nationwide Investor Destinations | Nationwide Mid vs. Nationwide Investor Destinations | Nationwide Mid vs. Nationwide Global Equity | Nationwide Mid vs. Nationwide Growth Fund |
| Frost Kempner vs. Frost Kempner Multi Cap | Frost Kempner vs. Brokerage And Investment | Frost Kempner vs. Nationwide Mid Cap | Frost Kempner vs. Angel Oak Ultrashort |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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