Correlation Between Nationwide Building and Whitbread PLC
Can any of the company-specific risk be diversified away by investing in both Nationwide Building and Whitbread PLC 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 Building and Whitbread PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide Building Society and Whitbread PLC, you can compare the effects of market volatilities on Nationwide Building and Whitbread PLC 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 Building with a short position of Whitbread PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Building and Whitbread PLC.
Diversification Opportunities for Nationwide Building and Whitbread PLC
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nationwide and Whitbread is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Building Society and Whitbread PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Whitbread PLC and Nationwide Building 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 Building Society are associated (or correlated) with Whitbread PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Whitbread PLC has no effect on the direction of Nationwide Building i.e., Nationwide Building and Whitbread PLC go up and down completely randomly.
Pair Corralation between Nationwide Building and Whitbread PLC
If you would invest 13,200 in Nationwide Building Society on September 3, 2024 and sell it today you would earn a total of 0.00 from holding Nationwide Building Society or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nationwide Building Society vs. Whitbread PLC
Performance |
| Timeline |
| Nationwide Building |
| Whitbread PLC |
Nationwide Building and Whitbread PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide Building and Whitbread PLC
The main advantage of trading using opposite Nationwide Building and Whitbread PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Building position performs unexpectedly, Whitbread PLC 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 Whitbread PLC will offset losses from the drop in Whitbread PLC's long position.| Nationwide Building vs. Veolia Environnement VE | Nationwide Building vs. Blackstone Loan Financing | Nationwide Building vs. United States Steel | Nationwide Building vs. Impax Environmental Markets |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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