Correlation Between Whitbread PLC and Nationwide Building
Can any of the company-specific risk be diversified away by investing in both Whitbread PLC and Nationwide Building 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 Whitbread PLC and Nationwide Building into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Whitbread PLC and Nationwide Building Society, you can compare the effects of market volatilities on Whitbread PLC and Nationwide Building 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 Whitbread PLC with a short position of Nationwide Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Whitbread PLC and Nationwide Building.
Diversification Opportunities for Whitbread PLC and Nationwide Building
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Whitbread and Nationwide is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Whitbread PLC and Nationwide Building Society in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Building and Whitbread PLC 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 Whitbread PLC are associated (or correlated) with Nationwide Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Building has no effect on the direction of Whitbread PLC i.e., Whitbread PLC and Nationwide Building go up and down completely randomly.
Pair Corralation between Whitbread PLC and Nationwide Building
If you would invest 13,200 in Nationwide Building Society on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Nationwide Building Society or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Whitbread PLC vs. Nationwide Building Society
Performance |
| Timeline |
| Whitbread PLC |
| Nationwide Building |
Whitbread PLC and Nationwide Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Whitbread PLC and Nationwide Building
The main advantage of trading using opposite Whitbread PLC and Nationwide Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Whitbread PLC position performs unexpectedly, Nationwide Building 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 Building will offset losses from the drop in Nationwide Building's long position.| Whitbread PLC vs. Viridian Therapeutics | Whitbread PLC vs. CVR Energy | Whitbread PLC vs. Nationwide Building Society | Whitbread PLC vs. Dollar Tree |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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