Correlation Between State Farm and Nationwide Bailard
Can any of the company-specific risk be diversified away by investing in both State Farm and Nationwide Bailard 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 State Farm and Nationwide Bailard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Farm Balanced and Nationwide Bailard Emerging, you can compare the effects of market volatilities on State Farm and Nationwide Bailard 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 State Farm with a short position of Nationwide Bailard. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Farm and Nationwide Bailard.
Diversification Opportunities for State Farm and Nationwide Bailard
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between State and Nationwide is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding State Farm Balanced and Nationwide Bailard Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Bailard and State Farm 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 State Farm Balanced are associated (or correlated) with Nationwide Bailard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Bailard has no effect on the direction of State Farm i.e., State Farm and Nationwide Bailard go up and down completely randomly.
Pair Corralation between State Farm and Nationwide Bailard
If you would invest 7,431 in State Farm Balanced on August 26, 2024 and sell it today you would earn a total of 2,306 from holding State Farm Balanced or generate 31.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
State Farm Balanced vs. Nationwide Bailard Emerging
Performance |
| Timeline |
| State Farm Balanced |
| Nationwide Bailard |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
State Farm and Nationwide Bailard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Farm and Nationwide Bailard
The main advantage of trading using opposite State Farm and Nationwide Bailard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Farm position performs unexpectedly, Nationwide Bailard 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 Bailard will offset losses from the drop in Nationwide Bailard's long position.| State Farm vs. Oaktree Diversifiedome | State Farm vs. Tiaa Cref Lifestyle Conservative | State Farm vs. Massmutual Premier Diversified | State Farm vs. Pioneer Diversified High |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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