Correlation Between Nationwide Global and Cargile Fund
Can any of the company-specific risk be diversified away by investing in both Nationwide Global and Cargile Fund 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 Nationwide Global and Cargile Fund into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide Global Equity and Cargile Fund, you can compare the effects of market volatilities on Nationwide Global and Cargile Fund 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 Nationwide Global with a short position of Cargile Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Global and Cargile Fund.
Diversification Opportunities for Nationwide Global and Cargile Fund
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NATIONWIDE and Cargile is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Global Equity and Cargile Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cargile Fund and Nationwide Global 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 Nationwide Global Equity are associated (or correlated) with Cargile Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cargile Fund has no effect on the direction of Nationwide Global i.e., Nationwide Global and Cargile Fund go up and down completely randomly.
Pair Corralation between Nationwide Global and Cargile Fund
Assuming the 90 days horizon Nationwide Global Equity is expected to generate 1.49 times more return on investment than Cargile Fund. However, Nationwide Global is 1.49 times more volatile than Cargile Fund. It trades about 0.04 of its potential returns per unit of risk. Cargile Fund is currently generating about 0.01 per unit of risk. If you would invest 1,798 in Nationwide Global Equity on October 4, 2024 and sell it today you would earn a total of 301.00 from holding Nationwide Global Equity or generate 16.74% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Nationwide Global Equity vs. Cargile Fund
Performance |
Timeline |
Nationwide Global Equity |
Cargile Fund |
Nationwide Global and Cargile Fund Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Nationwide Global and Cargile Fund
The main advantage of trading using opposite Nationwide Global and Cargile Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Global position performs unexpectedly, Cargile Fund 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 Cargile Fund will offset losses from the drop in Cargile Fund's long position.The idea behind Nationwide Global Equity and Cargile Fund 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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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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