Correlation Between Cargile Fund and Nationwide Global

Can any of the company-specific risk be diversified away by investing in both Cargile Fund and Nationwide Global 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 Cargile Fund and Nationwide Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cargile Fund and Nationwide Global Equity, you can compare the effects of market volatilities on Cargile Fund and Nationwide Global 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 Cargile Fund with a short position of Nationwide Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cargile Fund and Nationwide Global.

Diversification Opportunities for Cargile Fund and Nationwide Global

0.88

Correlation Coefficient

Cargile Fund  Nationwide Global

Very poor diversification

The 3 months correlation between Cargile and Nationwide is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Cargile Fund and Nationwide Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Global Equity and Cargile Fund 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 Cargile Fund are associated (or correlated) with Nationwide Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Global Equity has no effect on the direction of Cargile Fund i.e., Cargile Fund and Nationwide Global go up and down completely randomly.

Pair Corralation between Cargile Fund and Nationwide Global

Assuming the 90 days horizon Cargile Fund is expected to under-perform the Nationwide Global. But the mutual fund apears to be less risky and, when comparing its historical volatility, Cargile Fund is 1.8 times less risky than Nationwide Global. The mutual fund trades about -0.1 of its potential returns per unit of risk. The Nationwide Global Equity is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest  2,137  in Nationwide Global Equity on December 24, 2024 and sell it today you would lose (25.00) from holding Nationwide Global Equity or give up 1.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Cargile Fund  vs.  Nationwide Global Equity

Cargile Fund

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cargile Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Cargile Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nationwide Global Equity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nationwide Global Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Nationwide Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Cargile Fund and Nationwide Global

The main advantage of trading using opposite Cargile Fund and Nationwide Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cargile Fund position performs unexpectedly, Nationwide Global 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 Global will offset losses from the drop in Nationwide Global's long position.

The idea behind Cargile Fund and Nationwide Global Equity pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.