Correlation Between Nationwide and Nationwide Growth
Can any of the company-specific risk be diversified away by investing in both Nationwide and Nationwide Growth 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 Nationwide Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide E Plus and Nationwide Growth Fund, you can compare the effects of market volatilities on Nationwide and Nationwide Growth 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 Nationwide Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide and Nationwide Growth.
Diversification Opportunities for Nationwide and Nationwide Growth
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nationwide and NATIONWIDE is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide E Plus and Nationwide Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Growth 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 E Plus are associated (or correlated) with Nationwide Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Growth has no effect on the direction of Nationwide i.e., Nationwide and Nationwide Growth go up and down completely randomly.
Pair Corralation between Nationwide and Nationwide Growth
Assuming the 90 days horizon Nationwide E Plus is expected to under-perform the Nationwide Growth. But the mutual fund apears to be less risky and, when comparing its historical volatility, Nationwide E Plus is 2.3 times less risky than Nationwide Growth. The mutual fund trades about -0.08 of its potential returns per unit of risk. The Nationwide Growth Fund is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,604 in Nationwide Growth Fund on September 3, 2024 and sell it today you would earn a total of 137.00 from holding Nationwide Growth Fund or generate 8.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nationwide E Plus vs. Nationwide Growth Fund
Performance |
| Timeline |
| Nationwide E Plus |
| Nationwide Growth |
Nationwide and Nationwide Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide and Nationwide Growth
The main advantage of trading using opposite Nationwide and Nationwide Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide position performs unexpectedly, Nationwide Growth 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 Growth will offset losses from the drop in Nationwide Growth's long position.| Nationwide vs. Volumetric Fund Volumetric | Nationwide vs. Fabxx | Nationwide vs. T Rowe Price | Nationwide vs. Aam Select Income |
| Nationwide Growth vs. Vanguard Total Stock | Nationwide Growth vs. Vanguard 500 Index | Nationwide Growth vs. Vanguard Total Stock | Nationwide Growth vs. Vanguard Total Stock |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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