Correlation Between Nationwide Growth and American Funds
Can any of the company-specific risk be diversified away by investing in both Nationwide Growth and American Funds 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 American Funds 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 American Funds Tax Exempt, you can compare the effects of market volatilities on Nationwide Growth and American Funds 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 American Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Growth and American Funds.
Diversification Opportunities for Nationwide Growth and American Funds
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Nationwide and American is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Growth Fund and American Funds Tax Exempt in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Funds Tax 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 American Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Funds Tax has no effect on the direction of Nationwide Growth i.e., Nationwide Growth and American Funds go up and down completely randomly.
Pair Corralation between Nationwide Growth and American Funds
Assuming the 90 days horizon Nationwide Growth Fund is expected to generate 5.2 times more return on investment than American Funds. However, Nationwide Growth is 5.2 times more volatile than American Funds Tax Exempt. It trades about 0.18 of its potential returns per unit of risk. American Funds Tax Exempt is currently generating about 0.03 per unit of risk. If you would invest 1,626 in Nationwide Growth Fund on September 12, 2024 and sell it today you would earn a total of 129.00 from holding Nationwide Growth Fund or generate 7.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Nationwide Growth Fund vs. American Funds Tax Exempt
Performance |
| Timeline |
| Nationwide Growth |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| American Funds Tax |
Nationwide Growth and American Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide Growth and American Funds
The main advantage of trading using opposite Nationwide Growth and American Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Growth position performs unexpectedly, American Funds 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 American Funds will offset losses from the drop in American Funds' 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 |
| American Funds vs. Alliancebernstein National Municipal | American Funds vs. Morningstar Defensive Bond | American Funds vs. The National Tax Free | American Funds vs. Doubleline Yield Opportunities |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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