Correlation Between Nationwide International and Leggmason Partners

Can any of the company-specific risk be diversified away by investing in both Nationwide International and Leggmason Partners 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 Leggmason Partners 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 Leggmason Partners Institutional, you can compare the effects of market volatilities on Nationwide International and Leggmason Partners 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 Leggmason Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide International and Leggmason Partners.

Diversification Opportunities for Nationwide International and Leggmason Partners

0.0

Correlation Coefficient

Nationwide International  Leggmason Partners

Pay attention - limited upside

The 3 months correlation between Nationwide and Leggmason is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide International Index and Leggmason Partners Institution in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leggmason Partners 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 Leggmason Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leggmason Partners has no effect on the direction of Nationwide International i.e., Nationwide International and Leggmason Partners go up and down completely randomly.

Pair Corralation between Nationwide International and Leggmason Partners

If you would invest  100.00  in Leggmason Partners Institutional on September 17, 2024 and sell it today you would earn a total of  0.00  from holding Leggmason Partners Institutional or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Nationwide International Index  vs.  Leggmason Partners Institution

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 forward indicators, Nationwide International is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Leggmason Partners

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Nationwide International and Leggmason Partners

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

The idea behind Nationwide International Index and Leggmason Partners Institutional 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.