Correlation Between Global X and Nationwide
Can any of the company-specific risk be diversified away by investing in both Global X and Nationwide 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 Global X and Nationwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global X SP and Nationwide, you can compare the effects of market volatilities on Global X and Nationwide 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 Global X with a short position of Nationwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global X and Nationwide.
Diversification Opportunities for Global X and Nationwide
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Global and Nationwide is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Global X SP and Nationwide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide and Global X 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 Global X SP are associated (or correlated) with Nationwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide has no effect on the direction of Global X i.e., Global X and Nationwide go up and down completely randomly.
Pair Corralation between Global X and Nationwide
Given the investment horizon of 90 days Global X SP is expected to generate 0.83 times more return on investment than Nationwide. However, Global X SP is 1.2 times less risky than Nationwide. It trades about 0.11 of its potential returns per unit of risk. Nationwide is currently generating about 0.09 per unit of risk. If you would invest 3,259 in Global X SP on August 30, 2024 and sell it today you would earn a total of 946.00 from holding Global X SP or generate 29.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 31.05% |
| Values | Daily Returns |
Global X SP vs. Nationwide
Performance |
| Timeline |
| Global X SP |
| Nationwide |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Global X and Nationwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global X and Nationwide
The main advantage of trading using opposite Global X and Nationwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global X position performs unexpectedly, Nationwide 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 will offset losses from the drop in Nationwide's long position.| Global X vs. Global X Russell | Global X vs. Global X NASDAQ | Global X vs. NEOS ETF Trust | Global X vs. JPMorgan Equity Premium |
| Nationwide vs. Global X SP | Nationwide vs. Amplify CWP Enhanced | Nationwide vs. Global X Russell | Nationwide vs. JPMorgan Nasdaq Equity |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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