Correlation Between Nationwide Destination and Nationwide Bond
Can any of the company-specific risk be diversified away by investing in both Nationwide Destination and Nationwide Bond 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 Destination and Nationwide Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide Destination 2055 and Nationwide Bond Index, you can compare the effects of market volatilities on Nationwide Destination and Nationwide Bond 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 Destination with a short position of Nationwide Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Destination and Nationwide Bond.
Diversification Opportunities for Nationwide Destination and Nationwide Bond
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nationwide and Nationwide is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Destination 2055 and Nationwide Bond Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Bond Index and Nationwide Destination 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 Destination 2055 are associated (or correlated) with Nationwide Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Bond Index has no effect on the direction of Nationwide Destination i.e., Nationwide Destination and Nationwide Bond go up and down completely randomly.
Pair Corralation between Nationwide Destination and Nationwide Bond
Assuming the 90 days horizon Nationwide Destination 2055 is expected to generate 1.58 times more return on investment than Nationwide Bond. However, Nationwide Destination is 1.58 times more volatile than Nationwide Bond Index. It trades about 0.35 of its potential returns per unit of risk. Nationwide Bond Index is currently generating about 0.09 per unit of risk. If you would invest 1,499 in Nationwide Destination 2055 on September 1, 2024 and sell it today you would earn a total of 69.00 from holding Nationwide Destination 2055 or generate 4.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nationwide Destination 2055 vs. Nationwide Bond Index
Performance |
| Timeline |
| Nationwide Destination |
| Nationwide Bond Index |
Nationwide Destination and Nationwide Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide Destination and Nationwide Bond
The main advantage of trading using opposite Nationwide Destination and Nationwide Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Destination position performs unexpectedly, Nationwide Bond 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 Nationwide Bond will offset losses from the drop in Nationwide Bond's long position.| Nationwide Destination vs. T Rowe Price | Nationwide Destination vs. Goldman Sachs Large | Nationwide Destination vs. Old Westbury Large | Nationwide Destination vs. Jhancock Disciplined Value |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |