Correlation Between Ab Small and Nationwide Small
Can any of the company-specific risk be diversified away by investing in both Ab Small and Nationwide Small 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 Ab Small and Nationwide Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Small Cap and Nationwide Small Cap, you can compare the effects of market volatilities on Ab Small and Nationwide Small 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 Ab Small with a short position of Nationwide Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Small and Nationwide Small.
Diversification Opportunities for Ab Small and Nationwide Small
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between QUAIX and NATIONWIDE is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Ab Small Cap and Nationwide Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Small Cap and Ab Small 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 Ab Small Cap are associated (or correlated) with Nationwide Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Small Cap has no effect on the direction of Ab Small i.e., Ab Small and Nationwide Small go up and down completely randomly.
Pair Corralation between Ab Small and Nationwide Small
Assuming the 90 days horizon Ab Small Cap is expected to generate 1.02 times more return on investment than Nationwide Small. However, Ab Small is 1.02 times more volatile than Nationwide Small Cap. It trades about 0.1 of its potential returns per unit of risk. Nationwide Small Cap is currently generating about 0.09 per unit of risk. If you would invest 6,032 in Ab Small Cap on August 28, 2024 and sell it today you would earn a total of 1,768 from holding Ab Small Cap or generate 29.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Small Cap vs. Nationwide Small Cap
Performance |
| Timeline |
| Ab Small Cap |
| Nationwide Small Cap |
Ab Small and Nationwide Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Small and Nationwide Small
The main advantage of trading using opposite Ab Small and Nationwide Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Small position performs unexpectedly, Nationwide Small 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 Small will offset losses from the drop in Nationwide Small's long position.| Ab Small vs. Alliancebernstein Global High | Ab Small vs. Morningstar Aggressive Growth | Ab Small vs. Ab Global Risk | Ab Small vs. Lgm Risk Managed |
| Nationwide Small vs. Needham Aggressive Growth | Nationwide Small vs. Siit High Yield | Nationwide Small vs. Morningstar Aggressive Growth | Nationwide Small vs. Franklin High Income |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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