Correlation Between Nationwide Bond and Nationwide Global
Can any of the company-specific risk be diversified away by investing in both Nationwide Bond 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 Bond 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 Bond Fund and Nationwide Global Equity, you can compare the effects of market volatilities on Nationwide Bond 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 Bond with a short position of Nationwide Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Bond and Nationwide Global.
Diversification Opportunities for Nationwide Bond and Nationwide Global
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nationwide and Nationwide is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Bond 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 Bond 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 Bond 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 Bond i.e., Nationwide Bond and Nationwide Global go up and down completely randomly.
Pair Corralation between Nationwide Bond and Nationwide Global
Assuming the 90 days horizon Nationwide Bond Fund is expected to under-perform the Nationwide Global. But the mutual fund apears to be less risky and, when comparing its historical volatility, Nationwide Bond Fund is 2.55 times less risky than Nationwide Global. The mutual fund trades about -0.09 of its potential returns per unit of risk. The Nationwide Global Equity is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,303 in Nationwide Global Equity on August 26, 2024 and sell it today you would earn a total of 35.00 from holding Nationwide Global Equity or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nationwide Bond Fund vs. Nationwide Global Equity
Performance |
| Timeline |
| Nationwide Bond |
| Nationwide Global Equity |
Nationwide Bond and Nationwide Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide Bond and Nationwide Global
The main advantage of trading using opposite Nationwide Bond and Nationwide Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Bond 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.The idea behind Nationwide Bond Fund and Nationwide Global Equity pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |