Correlation Between Nationwide Mid and Gabelli Val

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

By analyzing existing cross correlation between Nationwide Mid Cap and The Gabelli Val, you can compare the effects of market volatilities on Nationwide Mid and Gabelli Val 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 Mid with a short position of Gabelli Val. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Mid and Gabelli Val.

Diversification Opportunities for Nationwide Mid and Gabelli Val

0.82

Correlation Coefficient

Nationwide Mid  Gabelli Val

Very poor diversification

The 3 months correlation between Nationwide and Gabelli is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Mid Cap and The Gabelli Val in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Val and Nationwide Mid 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 Mid Cap are associated (or correlated) with Gabelli Val. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Val has no effect on the direction of Nationwide Mid i.e., Nationwide Mid and Gabelli Val go up and down completely randomly.

Pair Corralation between Nationwide Mid and Gabelli Val

Assuming the 90 days horizon Nationwide Mid Cap is expected to under-perform the Gabelli Val. In addition to that, Nationwide Mid is 1.27 times more volatile than The Gabelli Val. It trades about -0.18 of its total potential returns per unit of risk. The Gabelli Val is currently generating about -0.07 per unit of volatility. If you would invest  1,109  in The Gabelli Val on December 2, 2024 and sell it today you would lose (58.00) from holding The Gabelli Val or give up 5.23% of portfolio value over 90 days.

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

Nationwide Mid Cap  vs.  The Gabelli Val

Nationwide Mid Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nationwide Mid Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Gabelli Val

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Gabelli Val has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Gabelli Val 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 Mid and Gabelli Val

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

The idea behind Nationwide Mid Cap and The Gabelli Val 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.