Correlation Between Nationwide Fund and Nationwide Investor
Can any of the company-specific risk be diversified away by investing in both Nationwide Fund and Nationwide Investor 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 Fund and Nationwide Investor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide Fund Class and Nationwide Investor Destinations, you can compare the effects of market volatilities on Nationwide Fund and Nationwide Investor 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 Fund with a short position of Nationwide Investor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Fund and Nationwide Investor.
Diversification Opportunities for Nationwide Fund and Nationwide Investor
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nationwide and NATIONWIDE is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Fund Class and Nationwide Investor Destinatio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Investor and Nationwide Fund 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 Fund Class are associated (or correlated) with Nationwide Investor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Investor has no effect on the direction of Nationwide Fund i.e., Nationwide Fund and Nationwide Investor go up and down completely randomly.
Pair Corralation between Nationwide Fund and Nationwide Investor
Assuming the 90 days horizon Nationwide Fund Class is expected to generate 2.92 times more return on investment than Nationwide Investor. However, Nationwide Fund is 2.92 times more volatile than Nationwide Investor Destinations. It trades about 0.11 of its potential returns per unit of risk. Nationwide Investor Destinations is currently generating about 0.14 per unit of risk. If you would invest 3,217 in Nationwide Fund Class on September 1, 2024 and sell it today you would earn a total of 387.00 from holding Nationwide Fund Class or generate 12.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nationwide Fund Class vs. Nationwide Investor Destinatio
Performance |
| Timeline |
| Nationwide Fund Class |
| Nationwide Investor |
Nationwide Fund and Nationwide Investor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide Fund and Nationwide Investor
The main advantage of trading using opposite Nationwide Fund and Nationwide Investor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Fund position performs unexpectedly, Nationwide Investor 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 Investor will offset losses from the drop in Nationwide Investor's long position.| Nationwide Fund vs. Nationwide Mid Cap | Nationwide Fund vs. Nationwide Small Cap | Nationwide Fund vs. Nationwide International Index | Nationwide Fund vs. Nationwide Fund Institutional |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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