Correlation Between Nationwide and NEOS ETF
Can any of the company-specific risk be diversified away by investing in both Nationwide and NEOS ETF 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 and NEOS ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide and NEOS ETF Trust, you can compare the effects of market volatilities on Nationwide and NEOS ETF 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 with a short position of NEOS ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide and NEOS ETF.
Diversification Opportunities for Nationwide and NEOS ETF
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nationwide and NEOS is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide and NEOS ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEOS ETF Trust and Nationwide 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 are associated (or correlated) with NEOS ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEOS ETF Trust has no effect on the direction of Nationwide i.e., Nationwide and NEOS ETF go up and down completely randomly.
Pair Corralation between Nationwide and NEOS ETF
Given the investment horizon of 90 days Nationwide is expected to generate about the same return on investment as NEOS ETF Trust. But, Nationwide is 1.68 times less risky than NEOS ETF. It trades about 0.23 of its potential returns per unit of risk. NEOS ETF Trust is currently generating about 0.14 per unit of risk. If you would invest 1,745 in NEOS ETF Trust on August 27, 2024 and sell it today you would earn a total of 849.00 from holding NEOS ETF Trust or generate 48.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 13.99% |
| Values | Daily Returns |
Nationwide vs. NEOS ETF Trust
Performance |
| Timeline |
| Nationwide |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| NEOS ETF Trust |
Nationwide and NEOS ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide and NEOS ETF
The main advantage of trading using opposite Nationwide and NEOS ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide position performs unexpectedly, NEOS ETF 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 NEOS ETF will offset losses from the drop in NEOS ETF's long position.The idea behind Nationwide and NEOS ETF Trust pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| NEOS ETF vs. Global X Russell | NEOS ETF vs. Global X SP | NEOS ETF vs. Global X NASDAQ | NEOS ETF vs. Amplify CWP Enhanced |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |