Correlation Between City National and Nationwide Bny
Can any of the company-specific risk be diversified away by investing in both City National and Nationwide Bny 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 City National and Nationwide Bny into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between City National Rochdale and Nationwide Bny Mellon, you can compare the effects of market volatilities on City National and Nationwide Bny 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 City National with a short position of Nationwide Bny. Check out your portfolio center. Please also check ongoing floating volatility patterns of City National and Nationwide Bny.
Diversification Opportunities for City National and Nationwide Bny
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between City and Nationwide is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding City National Rochdale and Nationwide Bny Mellon in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Bny Mellon and City National 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 City National Rochdale are associated (or correlated) with Nationwide Bny. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Bny Mellon has no effect on the direction of City National i.e., City National and Nationwide Bny go up and down completely randomly.
Pair Corralation between City National and Nationwide Bny
Assuming the 90 days horizon City National is expected to generate 4.24 times less return on investment than Nationwide Bny. But when comparing it to its historical volatility, City National Rochdale is 7.45 times less risky than Nationwide Bny. It trades about 0.18 of its potential returns per unit of risk. Nationwide Bny Mellon is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,588 in Nationwide Bny Mellon on September 13, 2024 and sell it today you would earn a total of 168.00 from holding Nationwide Bny Mellon or generate 10.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.2% |
| Values | Daily Returns |
City National Rochdale vs. Nationwide Bny Mellon
Performance |
| Timeline |
| City National Rochdale |
| Nationwide Bny Mellon |
City National and Nationwide Bny Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with City National and Nationwide Bny
The main advantage of trading using opposite City National and Nationwide Bny positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if City National position performs unexpectedly, Nationwide Bny 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 Bny will offset losses from the drop in Nationwide Bny's long position.| City National vs. Deutsche Real Estate | City National vs. Short Real Estate | City National vs. Sa Real Estate | City National vs. Jhancock Real Estate |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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