Correlation Between Nationwide Growth and Arrow Managed
Can any of the company-specific risk be diversified away by investing in both Nationwide Growth and Arrow Managed 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 Arrow Managed 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 Arrow Managed Futures, you can compare the effects of market volatilities on Nationwide Growth and Arrow Managed 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 Arrow Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Growth and Arrow Managed.
Diversification Opportunities for Nationwide Growth and Arrow Managed
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nationwide and Arrow is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Growth Fund and Arrow Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrow Managed Futures 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 Arrow Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrow Managed Futures has no effect on the direction of Nationwide Growth i.e., Nationwide Growth and Arrow Managed go up and down completely randomly.
Pair Corralation between Nationwide Growth and Arrow Managed
Assuming the 90 days horizon Nationwide Growth is expected to generate 3.88 times less return on investment than Arrow Managed. But when comparing it to its historical volatility, Nationwide Growth Fund is 2.14 times less risky than Arrow Managed. It trades about 0.17 of its potential returns per unit of risk. Arrow Managed Futures is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 543.00 in Arrow Managed Futures on September 13, 2024 and sell it today you would earn a total of 40.00 from holding Arrow Managed Futures or generate 7.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nationwide Growth Fund vs. Arrow Managed Futures
Performance |
| Timeline |
| Nationwide Growth |
| Arrow Managed Futures |
Nationwide Growth and Arrow Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide Growth and Arrow Managed
The main advantage of trading using opposite Nationwide Growth and Arrow Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Growth position performs unexpectedly, Arrow Managed 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 Arrow Managed will offset losses from the drop in Arrow Managed's long position.| Nationwide Growth vs. Arrow Managed Futures | Nationwide Growth vs. Western Asset Inflation | Nationwide Growth vs. Guidepath Managed Futures | Nationwide Growth vs. Federated Hermes Inflation |
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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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