Correlation Between Nationwide Bailard and State Farm
Can any of the company-specific risk be diversified away by investing in both Nationwide Bailard and State Farm 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 Bailard and State Farm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide Bailard Emerging and State Farm Balanced, you can compare the effects of market volatilities on Nationwide Bailard and State Farm 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 Bailard with a short position of State Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Bailard and State Farm.
Diversification Opportunities for Nationwide Bailard and State Farm
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nationwide and State is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Bailard Emerging and State Farm Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Farm Balanced and Nationwide Bailard 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 Bailard Emerging are associated (or correlated) with State Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Farm Balanced has no effect on the direction of Nationwide Bailard i.e., Nationwide Bailard and State Farm go up and down completely randomly.
Pair Corralation between Nationwide Bailard and State Farm
If you would invest 7,994 in State Farm Balanced on August 29, 2024 and sell it today you would earn a total of 1,830 from holding State Farm Balanced or generate 22.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Nationwide Bailard Emerging vs. State Farm Balanced
Performance |
| Timeline |
| Nationwide Bailard |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| State Farm Balanced |
Nationwide Bailard and State Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide Bailard and State Farm
The main advantage of trading using opposite Nationwide Bailard and State Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Bailard position performs unexpectedly, State Farm 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 State Farm will offset losses from the drop in State Farm's long position.The idea behind Nationwide Bailard Emerging and State Farm Balanced 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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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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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