Correlation Between Nationwide International and Baird Small/mid
Can any of the company-specific risk be diversified away by investing in both Nationwide International and Baird Small/mid 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 International and Baird Small/mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide International Small and Baird Smallmid Cap, you can compare the effects of market volatilities on Nationwide International and Baird Small/mid 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 International with a short position of Baird Small/mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide International and Baird Small/mid.
Diversification Opportunities for Nationwide International and Baird Small/mid
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Nationwide and Baird is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide International Small and Baird Smallmid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baird Smallmid Cap and Nationwide International 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 International Small are associated (or correlated) with Baird Small/mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baird Smallmid Cap has no effect on the direction of Nationwide International i.e., Nationwide International and Baird Small/mid go up and down completely randomly.
Pair Corralation between Nationwide International and Baird Small/mid
Assuming the 90 days horizon Nationwide International Small is expected to under-perform the Baird Small/mid. But the mutual fund apears to be less risky and, when comparing its historical volatility, Nationwide International Small is 1.49 times less risky than Baird Small/mid. The mutual fund trades about -0.02 of its potential returns per unit of risk. The Baird Smallmid Cap is currently generating about 0.39 of returns per unit of risk over similar time horizon. If you would invest 1,628 in Baird Smallmid Cap on September 2, 2024 and sell it today you would earn a total of 171.00 from holding Baird Smallmid Cap or generate 10.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nationwide International Small vs. Baird Smallmid Cap
Performance |
| Timeline |
| Nationwide International |
| Baird Smallmid Cap |
Nationwide International and Baird Small/mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide International and Baird Small/mid
The main advantage of trading using opposite Nationwide International and Baird Small/mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide International position performs unexpectedly, Baird Small/mid 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 Baird Small/mid will offset losses from the drop in Baird Small/mid's long position.| Nationwide International vs. Baird Smallmid Cap | Nationwide International vs. Touchstone Small Cap | Nationwide International vs. Chartwell Small Cap | Nationwide International vs. Fisher Small Cap |
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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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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