Correlation Between Growth Opportunities and Nationwide Growth
Can any of the company-specific risk be diversified away by investing in both Growth Opportunities and Nationwide Growth 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 Opportunities and Nationwide Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Growth Opportunities Fund and Nationwide Growth Fund, you can compare the effects of market volatilities on Growth Opportunities and Nationwide Growth 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 Opportunities with a short position of Nationwide Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Growth Opportunities and Nationwide Growth.
Diversification Opportunities for Growth Opportunities and Nationwide Growth
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between GROWTH and NATIONWIDE is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Growth Opportunities Fund and Nationwide Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Growth and Growth Opportunities 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 Opportunities Fund are associated (or correlated) with Nationwide Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Growth has no effect on the direction of Growth Opportunities i.e., Growth Opportunities and Nationwide Growth go up and down completely randomly.
Pair Corralation between Growth Opportunities and Nationwide Growth
Assuming the 90 days horizon Growth Opportunities Fund is expected to generate 1.32 times more return on investment than Nationwide Growth. However, Growth Opportunities is 1.32 times more volatile than Nationwide Growth Fund. It trades about 0.11 of its potential returns per unit of risk. Nationwide Growth Fund is currently generating about 0.11 per unit of risk. If you would invest 3,320 in Growth Opportunities Fund on September 2, 2024 and sell it today you would earn a total of 2,536 from holding Growth Opportunities Fund or generate 76.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Growth Opportunities Fund vs. Nationwide Growth Fund
Performance |
| Timeline |
| Growth Opportunities |
| Nationwide Growth |
Growth Opportunities and Nationwide Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Growth Opportunities and Nationwide Growth
The main advantage of trading using opposite Growth Opportunities and Nationwide Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Growth Opportunities position performs unexpectedly, Nationwide Growth 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 Growth will offset losses from the drop in Nationwide Growth's long position.| Growth Opportunities vs. Mid Cap Value Profund | Growth Opportunities vs. Mutual Of America | Growth Opportunities vs. American Century Etf | Growth Opportunities vs. Heartland Value Plus |
| Nationwide Growth vs. Nationwide Mid Cap | Nationwide Growth vs. Nationwide Small Cap | Nationwide Growth vs. Nationwide International Index | Nationwide Growth vs. Nationwide Fund Institutional |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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