Correlation Between Nationwide Bny and Champlain Small

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Can any of the company-specific risk be diversified away by investing in both Nationwide Bny and Champlain Small 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 Bny and Champlain Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide Bny Mellon and Champlain Small, you can compare the effects of market volatilities on Nationwide Bny and Champlain Small 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 Bny with a short position of Champlain Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Bny and Champlain Small.

Diversification Opportunities for Nationwide Bny and Champlain Small

0.86
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Nationwide and Champlain is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Bny Mellon and Champlain Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champlain Small and Nationwide Bny 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 Bny Mellon are associated (or correlated) with Champlain Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champlain Small has no effect on the direction of Nationwide Bny i.e., Nationwide Bny and Champlain Small go up and down completely randomly.

Pair Corralation between Nationwide Bny and Champlain Small

Assuming the 90 days horizon Nationwide Bny is expected to generate 1.3 times less return on investment than Champlain Small. But when comparing it to its historical volatility, Nationwide Bny Mellon is 1.58 times less risky than Champlain Small. It trades about 0.09 of its potential returns per unit of risk. Champlain Small is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,123  in Champlain Small on September 14, 2024 and sell it today you would earn a total of  445.00  from holding Champlain Small or generate 20.96% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy99.6%
ValuesDaily Returns

Nationwide Bny Mellon  vs.  Champlain Small

 Performance 
       Timeline  
Nationwide Bny Mellon 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Nationwide Bny Mellon are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Nationwide Bny is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Champlain Small 

Risk-Adjusted Performance

12 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Champlain Small are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Champlain Small may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Nationwide Bny and Champlain Small Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Nationwide Bny and Champlain Small

The main advantage of trading using opposite Nationwide Bny and Champlain Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Bny position performs unexpectedly, Champlain Small 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 Champlain Small will offset losses from the drop in Champlain Small's long position.
The idea behind Nationwide Bny Mellon and Champlain Small 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.
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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.

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