Correlation Between Nationwide Bond and Nationwide Growth
Can any of the company-specific risk be diversified away by investing in both Nationwide Bond 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 Bond 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 Bond Index and Nationwide Growth Fund, you can compare the effects of market volatilities on Nationwide Bond 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 Bond with a short position of Nationwide Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Bond and Nationwide Growth.
Diversification Opportunities for Nationwide Bond and Nationwide Growth
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nationwide and Nationwide is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Bond Index 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 Bond 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 Bond Index 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 Bond i.e., Nationwide Bond and Nationwide Growth go up and down completely randomly.
Pair Corralation between Nationwide Bond and Nationwide Growth
Assuming the 90 days horizon Nationwide Bond is expected to generate 5.39 times less return on investment than Nationwide Growth. But when comparing it to its historical volatility, Nationwide Bond Index is 2.14 times less risky than Nationwide Growth. It trades about 0.06 of its potential returns per unit of risk. Nationwide Growth Fund is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,129 in Nationwide Growth Fund on August 26, 2024 and sell it today you would earn a total of 331.00 from holding Nationwide Growth Fund or generate 29.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nationwide Bond Index vs. Nationwide Growth Fund
Performance |
| Timeline |
| Nationwide Bond Index |
| Nationwide Growth |
Nationwide Bond and Nationwide Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide Bond and Nationwide Growth
The main advantage of trading using opposite Nationwide Bond and Nationwide Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Bond 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 Bond vs. Calvert Moderate Allocation | Nationwide Bond vs. Wisdomtree Siegel Moderate | Nationwide Bond vs. Hartford Moderate Allocation | Nationwide Bond vs. Saat Moderate Strategy |
| Nationwide Growth vs. Nationwide Mid Cap | Nationwide Growth vs. Nationwide Small Cap | Nationwide Growth vs. Nationwide International Index | Nationwide Growth vs. Siit Dynamic Asset |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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