Correlation Between Nationwide Fund and Jennison Natural
Can any of the company-specific risk be diversified away by investing in both Nationwide Fund and Jennison Natural 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 Jennison Natural 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 Jennison Natural Resources, you can compare the effects of market volatilities on Nationwide Fund and Jennison Natural 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 Jennison Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Fund and Jennison Natural.
Diversification Opportunities for Nationwide Fund and Jennison Natural
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nationwide and Jennison is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Fund Class and Jennison Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jennison Natural Res 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 Jennison Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jennison Natural Res has no effect on the direction of Nationwide Fund i.e., Nationwide Fund and Jennison Natural go up and down completely randomly.
Pair Corralation between Nationwide Fund and Jennison Natural
Assuming the 90 days horizon Nationwide Fund Class is expected to generate 0.55 times more return on investment than Jennison Natural. However, Nationwide Fund Class is 1.81 times less risky than Jennison Natural. It trades about 0.12 of its potential returns per unit of risk. Jennison Natural Resources is currently generating about -0.02 per unit of risk. If you would invest 3,578 in Nationwide Fund Class on September 12, 2024 and sell it today you would earn a total of 55.00 from holding Nationwide Fund Class or generate 1.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nationwide Fund Class vs. Jennison Natural Resources
Performance |
| Timeline |
| Nationwide Fund Class |
| Jennison Natural Res |
Nationwide Fund and Jennison Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide Fund and Jennison Natural
The main advantage of trading using opposite Nationwide Fund and Jennison Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Fund position performs unexpectedly, Jennison Natural 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 Jennison Natural will offset losses from the drop in Jennison Natural's long position.| Nationwide Fund vs. General Money Market | Nationwide Fund vs. Prudential Government Money | Nationwide Fund vs. Chestnut Street Exchange | Nationwide Fund vs. Edward Jones Money |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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