Correlation Between Nationwide Growth and Ashmore Emerging
Can any of the company-specific risk be diversified away by investing in both Nationwide Growth and Ashmore Emerging 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 Growth and Ashmore Emerging into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide Growth Fund and Ashmore Emerging Markets, you can compare the effects of market volatilities on Nationwide Growth and Ashmore Emerging 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 Growth with a short position of Ashmore Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Growth and Ashmore Emerging.
Diversification Opportunities for Nationwide Growth and Ashmore Emerging
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NATIONWIDE and Ashmore is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Growth Fund and Ashmore Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ashmore Emerging Markets and Nationwide Growth 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 Growth Fund are associated (or correlated) with Ashmore Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ashmore Emerging Markets has no effect on the direction of Nationwide Growth i.e., Nationwide Growth and Ashmore Emerging go up and down completely randomly.
Pair Corralation between Nationwide Growth and Ashmore Emerging
Assuming the 90 days horizon Nationwide Growth Fund is expected to generate 3.54 times more return on investment than Ashmore Emerging. However, Nationwide Growth is 3.54 times more volatile than Ashmore Emerging Markets. It trades about 0.05 of its potential returns per unit of risk. Ashmore Emerging Markets is currently generating about 0.1 per unit of risk. If you would invest 1,202 in Nationwide Growth Fund on January 17, 2025 and sell it today you would earn a total of 302.00 from holding Nationwide Growth Fund or generate 25.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nationwide Growth Fund vs. Ashmore Emerging Markets
Performance |
| Timeline |
| Nationwide Growth |
| Ashmore Emerging Markets |
Nationwide Growth and Ashmore Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide Growth and Ashmore Emerging
The main advantage of trading using opposite Nationwide Growth and Ashmore Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Growth position performs unexpectedly, Ashmore Emerging 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 Ashmore Emerging will offset losses from the drop in Ashmore Emerging's long position.| Nationwide Growth vs. Longboard Alternative Growth | Nationwide Growth vs. Crafword Dividend Growth | Nationwide Growth vs. Mid Cap Growth | Nationwide Growth vs. L Abbett Growth |
| Ashmore Emerging vs. Gmo Global Equity | Ashmore Emerging vs. Transamerica International Equity | Ashmore Emerging vs. Dreyfusstandish Global Fixed | Ashmore Emerging vs. Morningstar International Equity |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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