Correlation Between Siit Sp and Nationwide
Can any of the company-specific risk be diversified away by investing in both Siit Sp and Nationwide 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 Siit Sp and Nationwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Siit Sp 500 and Nationwide Sp 500, you can compare the effects of market volatilities on Siit Sp and Nationwide 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 Siit Sp with a short position of Nationwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Siit Sp and Nationwide.
Diversification Opportunities for Siit Sp and Nationwide
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Siit and Nationwide is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Siit Sp 500 and Nationwide Sp 500 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Sp 500 and Siit Sp 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 Siit Sp 500 are associated (or correlated) with Nationwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Sp 500 has no effect on the direction of Siit Sp i.e., Siit Sp and Nationwide go up and down completely randomly.
Pair Corralation between Siit Sp and Nationwide
Assuming the 90 days horizon Siit Sp 500 is expected to generate 0.99 times more return on investment than Nationwide. However, Siit Sp 500 is 1.01 times less risky than Nationwide. It trades about 0.07 of its potential returns per unit of risk. Nationwide Sp 500 is currently generating about 0.07 per unit of risk. If you would invest 2,020 in Siit Sp 500 on November 5, 2024 and sell it today you would earn a total of 23.00 from holding Siit Sp 500 or generate 1.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Siit Sp 500 vs. Nationwide Sp 500
Performance |
| Timeline |
| Siit Sp 500 |
| Nationwide Sp 500 |
Siit Sp and Nationwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Siit Sp and Nationwide
The main advantage of trading using opposite Siit Sp and Nationwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Siit Sp position performs unexpectedly, Nationwide 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 will offset losses from the drop in Nationwide's long position.| Siit Sp vs. Columbia Large Cap | Siit Sp vs. T Rowe Price | Siit Sp vs. Northern Stock Index | Siit Sp vs. Siit Dynamic Asset |
| Nationwide vs. Nationwide Mid Cap | Nationwide vs. Nationwide Small Cap | Nationwide vs. Nationwide International Index | Nationwide vs. Nationwide Sp 500 |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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