Correlation Between Apexcm Small/mid and Nationwide Small
Can any of the company-specific risk be diversified away by investing in both Apexcm Small/mid and Nationwide Small 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 Apexcm Small/mid and Nationwide Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apexcm Smallmid Cap and Nationwide Small Cap, you can compare the effects of market volatilities on Apexcm Small/mid and Nationwide Small 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 Apexcm Small/mid with a short position of Nationwide Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apexcm Small/mid and Nationwide Small.
Diversification Opportunities for Apexcm Small/mid and Nationwide Small
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Apexcm and Nationwide is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Apexcm Smallmid Cap and Nationwide Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Small Cap and Apexcm Small/mid 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 Apexcm Smallmid Cap are associated (or correlated) with Nationwide Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Small Cap has no effect on the direction of Apexcm Small/mid i.e., Apexcm Small/mid and Nationwide Small go up and down completely randomly.
Pair Corralation between Apexcm Small/mid and Nationwide Small
Assuming the 90 days horizon Apexcm Smallmid Cap is expected to generate 0.82 times more return on investment than Nationwide Small. However, Apexcm Smallmid Cap is 1.22 times less risky than Nationwide Small. It trades about 0.06 of its potential returns per unit of risk. Nationwide Small Cap is currently generating about 0.04 per unit of risk. If you would invest 1,328 in Apexcm Smallmid Cap on October 5, 2024 and sell it today you would earn a total of 382.00 from holding Apexcm Smallmid Cap or generate 28.77% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Apexcm Smallmid Cap vs. Nationwide Small Cap
Performance |
Timeline |
Apexcm Smallmid Cap |
Nationwide Small Cap |
Apexcm Small/mid and Nationwide Small Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Apexcm Small/mid and Nationwide Small
The main advantage of trading using opposite Apexcm Small/mid and Nationwide Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apexcm Small/mid position performs unexpectedly, Nationwide Small 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 Small will offset losses from the drop in Nationwide Small's long position.Apexcm Small/mid vs. Red Oak Technology | Apexcm Small/mid vs. Invesco Technology Fund | Apexcm Small/mid vs. Firsthand Technology Opportunities | Apexcm Small/mid vs. Technology Ultrasector Profund |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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