Correlation Between Nationwide Growth and Mid Cap
Can any of the company-specific risk be diversified away by investing in both Nationwide Growth and Mid Cap 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 Mid Cap 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 Mid Cap Growth, you can compare the effects of market volatilities on Nationwide Growth and Mid Cap 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 Mid Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Growth and Mid Cap.
Diversification Opportunities for Nationwide Growth and Mid Cap
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between NATIONWIDE and Mid is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Growth Fund and Mid Cap Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mid Cap Growth 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 Mid Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mid Cap Growth has no effect on the direction of Nationwide Growth i.e., Nationwide Growth and Mid Cap go up and down completely randomly.
Pair Corralation between Nationwide Growth and Mid Cap
Assuming the 90 days horizon Nationwide Growth is expected to generate 2.18 times less return on investment than Mid Cap. But when comparing it to its historical volatility, Nationwide Growth Fund is 1.69 times less risky than Mid Cap. It trades about 0.38 of its potential returns per unit of risk. Mid Cap Growth is currently generating about 0.49 of returns per unit of risk over similar time horizon. If you would invest 3,663 in Mid Cap Growth on September 3, 2024 and sell it today you would earn a total of 470.00 from holding Mid Cap Growth or generate 12.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nationwide Growth Fund vs. Mid Cap Growth
Performance |
| Timeline |
| Nationwide Growth |
| Mid Cap Growth |
Nationwide Growth and Mid Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide Growth and Mid Cap
The main advantage of trading using opposite Nationwide Growth and Mid Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Growth position performs unexpectedly, Mid Cap 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 Mid Cap will offset losses from the drop in Mid Cap's long position.| Nationwide Growth vs. Vanguard Total Stock | Nationwide Growth vs. Vanguard 500 Index | Nationwide Growth vs. Vanguard Total Stock | Nationwide Growth vs. Vanguard Total Stock |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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