Correlation Between Nasdaq 100 and Nationwide Growth
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 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 Nasdaq 100 and Nationwide Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 Index Fund and Nationwide Growth Fund, you can compare the effects of market volatilities on Nasdaq 100 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 Nasdaq 100 with a short position of Nationwide Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Nationwide Growth.
Diversification Opportunities for Nasdaq 100 and Nationwide Growth
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nasdaq and Nationwide is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Index 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 Nasdaq 100 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 Nasdaq 100 Index 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 Nasdaq 100 i.e., Nasdaq 100 and Nationwide Growth go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Nationwide Growth
Assuming the 90 days horizon Nasdaq 100 Index Fund is expected to generate 1.44 times more return on investment than Nationwide Growth. However, Nasdaq 100 is 1.44 times more volatile than Nationwide Growth Fund. It trades about 0.09 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 3,937 in Nasdaq 100 Index Fund on September 12, 2024 and sell it today you would earn a total of 1,437 from holding Nasdaq 100 Index Fund or generate 36.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nasdaq 100 Index Fund vs. Nationwide Growth Fund
Performance |
| Timeline |
| Nasdaq 100 Index |
| Nationwide Growth |
Nasdaq 100 and Nationwide Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Nationwide Growth
The main advantage of trading using opposite Nasdaq 100 and Nationwide Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 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.| Nasdaq 100 vs. American Funds The | Nasdaq 100 vs. American Funds The | Nasdaq 100 vs. Growth Fund Of | Nasdaq 100 vs. Growth Fund Of |
| Nationwide Growth vs. Ab Small Cap | Nationwide Growth vs. T Rowe Price | Nationwide Growth vs. T Rowe Price | Nationwide Growth vs. Nasdaq 100 Index 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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