Correlation Between Western Asset and Nationwide Growth
Can any of the company-specific risk be diversified away by investing in both Western Asset 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 Western Asset and Nationwide Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Asset Inflation and Nationwide Growth Fund, you can compare the effects of market volatilities on Western Asset 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 Western Asset with a short position of Nationwide Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Nationwide Growth.
Diversification Opportunities for Western Asset and Nationwide Growth
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Western and Nationwide is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Western Asset Inflation and Nationwide Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Growth and Western Asset 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 Western Asset Inflation 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 Western Asset i.e., Western Asset and Nationwide Growth go up and down completely randomly.
Pair Corralation between Western Asset and Nationwide Growth
Assuming the 90 days horizon Western Asset is expected to generate 2.85 times less return on investment than Nationwide Growth. But when comparing it to its historical volatility, Western Asset Inflation is 2.08 times less risky than Nationwide Growth. It trades about 0.08 of its potential returns per unit of risk. Nationwide Growth Fund is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,723 in Nationwide Growth Fund on September 13, 2024 and sell it today you would earn a total of 21.00 from holding Nationwide Growth Fund or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Asset Inflation vs. Nationwide Growth Fund
Performance |
| Timeline |
| Western Asset Inflation |
| Nationwide Growth |
Western Asset and Nationwide Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Asset and Nationwide Growth
The main advantage of trading using opposite Western Asset and Nationwide Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Asset 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.| Western Asset vs. Goldman Sachs Clean | Western Asset vs. Short Precious Metals | Western Asset vs. Gold And Precious | Western Asset vs. Fidelity Advisor Gold |
| Nationwide Growth vs. Qs Large Cap | Nationwide Growth vs. Lord Abbett Affiliated | Nationwide Growth vs. Cb Large Cap | Nationwide Growth vs. Dunham Large Cap |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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