Correlation Between Vanguard Mid-cap and Nationwide Mid
Can any of the company-specific risk be diversified away by investing in both Vanguard Mid-cap and Nationwide Mid 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 Vanguard Mid-cap and Nationwide Mid into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Mid Cap Index and Nationwide Mid Cap, you can compare the effects of market volatilities on Vanguard Mid-cap and Nationwide Mid 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 Vanguard Mid-cap with a short position of Nationwide Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Mid-cap and Nationwide Mid.
Diversification Opportunities for Vanguard Mid-cap and Nationwide Mid
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between VANGUARD and Nationwide is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Mid Cap Index and Nationwide Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Mid Cap and Vanguard Mid-cap 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 Vanguard Mid Cap Index are associated (or correlated) with Nationwide Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Mid Cap has no effect on the direction of Vanguard Mid-cap i.e., Vanguard Mid-cap and Nationwide Mid go up and down completely randomly.
Pair Corralation between Vanguard Mid-cap and Nationwide Mid
Assuming the 90 days horizon Vanguard Mid-cap is expected to generate 1.01 times less return on investment than Nationwide Mid. But when comparing it to its historical volatility, Vanguard Mid Cap Index is 1.49 times less risky than Nationwide Mid. It trades about 0.45 of its potential returns per unit of risk. Nationwide Mid Cap is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 1,811 in Nationwide Mid Cap on September 4, 2024 and sell it today you would earn a total of 144.00 from holding Nationwide Mid Cap or generate 7.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Mid Cap Index vs. Nationwide Mid Cap
Performance |
| Timeline |
| Vanguard Mid Cap |
| Nationwide Mid Cap |
Vanguard Mid-cap and Nationwide Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Mid-cap and Nationwide Mid
The main advantage of trading using opposite Vanguard Mid-cap and Nationwide Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Mid-cap position performs unexpectedly, Nationwide Mid 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 Mid will offset losses from the drop in Nationwide Mid's long position.| Vanguard Mid-cap vs. Guggenheim High Yield | Vanguard Mid-cap vs. American Century High | Vanguard Mid-cap vs. Blackrock High Yield | Vanguard Mid-cap vs. Pgim High Yield |
| Nationwide Mid vs. Federated Mid Cap Index | Nationwide Mid vs. Nationwide Mid Cap | Nationwide Mid vs. Nationwide Mid Cap | Nationwide Mid vs. Dreyfus Midcap Index |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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