Correlation Between Adams Natural and Nationwide Global
Can any of the company-specific risk be diversified away by investing in both Adams Natural and Nationwide Global 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 Adams Natural and Nationwide Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adams Natural Resources and Nationwide Global Equity, you can compare the effects of market volatilities on Adams Natural and Nationwide Global 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 Adams Natural with a short position of Nationwide Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adams Natural and Nationwide Global.
Diversification Opportunities for Adams Natural and Nationwide Global
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Adams and Nationwide is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Adams Natural Resources and Nationwide Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Global Equity and Adams Natural 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 Adams Natural Resources are associated (or correlated) with Nationwide Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Global Equity has no effect on the direction of Adams Natural i.e., Adams Natural and Nationwide Global go up and down completely randomly.
Pair Corralation between Adams Natural and Nationwide Global
Considering the 90-day investment horizon Adams Natural Resources is expected to under-perform the Nationwide Global. In addition to that, Adams Natural is 1.33 times more volatile than Nationwide Global Equity. It trades about -0.18 of its total potential returns per unit of risk. Nationwide Global Equity is currently generating about 0.04 per unit of volatility. If you would invest 2,354 in Nationwide Global Equity on September 12, 2024 and sell it today you would earn a total of 14.00 from holding Nationwide Global Equity or generate 0.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adams Natural Resources vs. Nationwide Global Equity
Performance |
| Timeline |
| Adams Natural Resources |
| Nationwide Global Equity |
Adams Natural and Nationwide Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adams Natural and Nationwide Global
The main advantage of trading using opposite Adams Natural and Nationwide Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adams Natural position performs unexpectedly, Nationwide Global 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 Global will offset losses from the drop in Nationwide Global's long position.| Adams Natural vs. Oxford Lane Capital | Adams Natural vs. Orchid Island Capital | Adams Natural vs. Guggenheim Strategic Opportunities | Adams Natural vs. Stone Harbor Emerging |
| Nationwide Global vs. World Energy Fund | Nationwide Global vs. Energy Basic Materials | Nationwide Global vs. Adams Natural Resources | Nationwide Global vs. Alpsalerian Energy Infrastructure |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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