Correlation Between Growth Strategy and Nationwide Destination
Can any of the company-specific risk be diversified away by investing in both Growth Strategy and Nationwide Destination 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 Growth Strategy and Nationwide Destination into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Strategy Fund and Nationwide Destination 2055, you can compare the effects of market volatilities on Growth Strategy and Nationwide Destination 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 Growth Strategy with a short position of Nationwide Destination. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Strategy and Nationwide Destination.
Diversification Opportunities for Growth Strategy and Nationwide Destination
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GROWTH and Nationwide is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Growth Strategy Fund and Nationwide Destination 2055 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Destination and Growth Strategy 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 Growth Strategy Fund are associated (or correlated) with Nationwide Destination. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Destination has no effect on the direction of Growth Strategy i.e., Growth Strategy and Nationwide Destination go up and down completely randomly.
Pair Corralation between Growth Strategy and Nationwide Destination
Assuming the 90 days horizon Growth Strategy is expected to generate 1.08 times less return on investment than Nationwide Destination. But when comparing it to its historical volatility, Growth Strategy Fund is 1.17 times less risky than Nationwide Destination. It trades about 0.11 of its potential returns per unit of risk. Nationwide Destination 2055 is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,443 in Nationwide Destination 2055 on September 1, 2024 and sell it today you would earn a total of 140.00 from holding Nationwide Destination 2055 or generate 9.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 99.21% |
| Values | Daily Returns |
Growth Strategy Fund vs. Nationwide Destination 2055
Performance |
| Timeline |
| Growth Strategy |
| Nationwide Destination |
Growth Strategy and Nationwide Destination Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Strategy and Nationwide Destination
The main advantage of trading using opposite Growth Strategy and Nationwide Destination positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Strategy position performs unexpectedly, Nationwide Destination 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 Destination will offset losses from the drop in Nationwide Destination's long position.| Growth Strategy vs. International Developed Markets | Growth Strategy vs. Global Real Estate | Growth Strategy vs. Global Real Estate | Growth Strategy vs. Global Real Estate |
| Nationwide Destination vs. Goldman Sachs Emerging | Nationwide Destination vs. Angel Oak Multi Strategy | Nationwide Destination vs. Investec Emerging Markets | Nationwide Destination vs. Growth Strategy Fund |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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