Correlation Between NYSE Composite and Nationwide International
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Nationwide International 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 NYSE Composite and Nationwide International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Nationwide International Index, you can compare the effects of market volatilities on NYSE Composite and Nationwide International 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 NYSE Composite with a short position of Nationwide International. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Nationwide International.
Diversification Opportunities for NYSE Composite and Nationwide International
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Nationwide is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Nationwide International Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide International and NYSE Composite 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 NYSE Composite are associated (or correlated) with Nationwide International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide International has no effect on the direction of NYSE Composite i.e., NYSE Composite and Nationwide International go up and down completely randomly.
Pair Corralation between NYSE Composite and Nationwide International
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.82 times more return on investment than Nationwide International. However, NYSE Composite is 1.22 times less risky than Nationwide International. It trades about 0.24 of its potential returns per unit of risk. Nationwide International Index is currently generating about -0.17 per unit of risk. If you would invest 1,945,627 in NYSE Composite on August 26, 2024 and sell it today you would earn a total of 66,718 from holding NYSE Composite or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Nationwide International Index
Performance |
| Timeline |
NYSE Composite and Nationwide International Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Nationwide International Index
Pair trading matchups for Nationwide International
Pair Trading with NYSE Composite and Nationwide International
The main advantage of trading using opposite NYSE Composite and Nationwide International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Nationwide International 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 International will offset losses from the drop in Nationwide International's long position.| NYSE Composite vs. Grocery Outlet Holding | NYSE Composite vs. Tencent Music Entertainment | NYSE Composite vs. SunLink Health Systems | NYSE Composite vs. Getty Realty |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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