Correlation Between Nationwide International and Nationwide Bailard

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

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

Diversification Opportunities for Nationwide International and Nationwide Bailard

-0.66

Correlation Coefficient

Nationwide International  Nationwide Bailard

Excellent diversification

The 3 months correlation between Nationwide and Nationwide is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide International Index and Nationwide Bailard Nitive in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Bailard Nitive and Nationwide International 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 International Index are associated (or correlated) with Nationwide Bailard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Bailard Nitive has no effect on the direction of Nationwide International i.e., Nationwide International and Nationwide Bailard go up and down completely randomly.

Pair Corralation between Nationwide International and Nationwide Bailard

Assuming the 90 days horizon Nationwide International Index is expected to under-perform the Nationwide Bailard. But the mutual fund apears to be less risky and, when comparing its historical volatility, Nationwide International Index is 1.46 times less risky than Nationwide Bailard. The mutual fund trades about -0.06 of its potential returns per unit of risk. The Nationwide Bailard Nitive is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  1,666  in Nationwide Bailard Nitive on September 2, 2024 and sell it today you would earn a total of  210.00  from holding Nationwide Bailard Nitive or generate 12.61% return on investment over 90 days.

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

Nationwide International Index  vs.  Nationwide Bailard Nitive

Nationwide International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Nationwide Bailard Nitive

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nationwide Bailard Nitive are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical indicators, Nationwide Bailard may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Nationwide International and Nationwide Bailard

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

The idea behind Nationwide International Index and Nationwide Bailard Nitive 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.