Correlation Between Nationwide Fund and Commodities Strategy
Can any of the company-specific risk be diversified away by investing in both Nationwide Fund and Commodities Strategy 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 Fund and Commodities Strategy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide Fund Institutional and Commodities Strategy Fund, you can compare the effects of market volatilities on Nationwide Fund and Commodities Strategy 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 Fund with a short position of Commodities Strategy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Fund and Commodities Strategy.
Diversification Opportunities for Nationwide Fund and Commodities Strategy
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nationwide and Commodities is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Fund Institutional and Commodities Strategy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commodities Strategy and Nationwide Fund 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 Fund Institutional are associated (or correlated) with Commodities Strategy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commodities Strategy has no effect on the direction of Nationwide Fund i.e., Nationwide Fund and Commodities Strategy go up and down completely randomly.
Pair Corralation between Nationwide Fund and Commodities Strategy
Assuming the 90 days horizon Nationwide Fund Institutional is expected to generate 0.88 times more return on investment than Commodities Strategy. However, Nationwide Fund Institutional is 1.13 times less risky than Commodities Strategy. It trades about 0.36 of its potential returns per unit of risk. Commodities Strategy Fund is currently generating about -0.12 per unit of risk. If you would invest 3,313 in Nationwide Fund Institutional on September 4, 2024 and sell it today you would earn a total of 189.00 from holding Nationwide Fund Institutional or generate 5.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nationwide Fund Institutional vs. Commodities Strategy Fund
Performance |
| Timeline |
| Nationwide Fund Inst |
| Commodities Strategy |
Nationwide Fund and Commodities Strategy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide Fund and Commodities Strategy
The main advantage of trading using opposite Nationwide Fund and Commodities Strategy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Fund position performs unexpectedly, Commodities Strategy 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 Commodities Strategy will offset losses from the drop in Commodities Strategy's long position.| Nationwide Fund vs. Siit Ultra Short | Nationwide Fund vs. Quantitative Longshort Equity | Nationwide Fund vs. Vanguard Institutional Short Term | Nationwide Fund vs. Angel Oak Ultrashort |
| Commodities Strategy vs. Basic Materials Fund | Commodities Strategy vs. Energy Services Fund | Commodities Strategy vs. Energy Fund Investor | Commodities Strategy vs. Real Estate Fund |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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