Correlation Between Nationwide Growth and Nationwide Geneva

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

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

Diversification Opportunities for Nationwide Growth and Nationwide Geneva

0.93

Correlation Coefficient

Nationwide Growth  Nationwide Geneva

Almost no diversification

The 3 months correlation between Nationwide and Nationwide is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Growth Fund and Nationwide Geneva Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Geneva Small and Nationwide Growth 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 Growth Fund are associated (or correlated) with Nationwide Geneva. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Geneva Small has no effect on the direction of Nationwide Growth i.e., Nationwide Growth and Nationwide Geneva go up and down completely randomly.

Pair Corralation between Nationwide Growth and Nationwide Geneva

Assuming the 90 days horizon Nationwide Growth Fund is expected to generate 0.72 times more return on investment than Nationwide Geneva. However, Nationwide Growth Fund is 1.4 times less risky than Nationwide Geneva. It trades about 0.09 of its potential returns per unit of risk. Nationwide Geneva Small is currently generating about 0.04 per unit of risk. If you would invest  996.00  in Nationwide Growth Fund on October 8, 2024 and sell it today you would earn a total of  401.00  from holding Nationwide Growth Fund or generate 40.26% return on investment over 90 days.

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

Nationwide Growth Fund  vs.  Nationwide Geneva Small

Nationwide Growth

Risk-Adjusted Performance

0 of 100

Very Weak

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

Nationwide Geneva Small

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Nationwide Growth and Nationwide Geneva

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

The idea behind Nationwide Growth Fund and Nationwide Geneva Small 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.