Correlation Between Nationwide Inflation-protec and Abbey Capital
Can any of the company-specific risk be diversified away by investing in both Nationwide Inflation-protec and Abbey Capital 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 Inflation-protec and Abbey Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide Inflation Protected Securities and Abbey Capital Futures, you can compare the effects of market volatilities on Nationwide Inflation-protec and Abbey Capital 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 Inflation-protec with a short position of Abbey Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Inflation-protec and Abbey Capital.
Diversification Opportunities for Nationwide Inflation-protec and Abbey Capital
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nationwide and Abbey is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Inflation Protected and Abbey Capital Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abbey Capital Futures and Nationwide Inflation-protec 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 Inflation Protected Securities are associated (or correlated) with Abbey Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abbey Capital Futures has no effect on the direction of Nationwide Inflation-protec i.e., Nationwide Inflation-protec and Abbey Capital go up and down completely randomly.
Pair Corralation between Nationwide Inflation-protec and Abbey Capital
Assuming the 90 days horizon Nationwide Inflation Protected Securities is expected to generate 0.54 times more return on investment than Abbey Capital. However, Nationwide Inflation Protected Securities is 1.87 times less risky than Abbey Capital. It trades about 0.07 of its potential returns per unit of risk. Abbey Capital Futures is currently generating about -0.1 per unit of risk. If you would invest 874.00 in Nationwide Inflation Protected Securities on September 3, 2024 and sell it today you would earn a total of 21.00 from holding Nationwide Inflation Protected Securities or generate 2.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nationwide Inflation Protected vs. Abbey Capital Futures
Performance |
| Timeline |
| Nationwide Inflation-protec |
| Abbey Capital Futures |
Nationwide Inflation-protec and Abbey Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide Inflation-protec and Abbey Capital
The main advantage of trading using opposite Nationwide Inflation-protec and Abbey Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Inflation-protec position performs unexpectedly, Abbey Capital 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 Abbey Capital will offset losses from the drop in Abbey Capital's long position.| Nationwide Inflation-protec vs. California Bond Fund | Nationwide Inflation-protec vs. Ambrus Core Bond | Nationwide Inflation-protec vs. Ab Bond Inflation | Nationwide Inflation-protec vs. Blrc Sgy Mnp |
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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 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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