Correlation Between Mutual Of and Nationwide Fund

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

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

Diversification Opportunities for Mutual Of and Nationwide Fund

0.73

Correlation Coefficient

Mutual Of  Nationwide Fund

Poor diversification

The 3 months correlation between Mutual and Nationwide is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Mutual Of America and Nationwide Fund Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Fund Inst and Mutual Of 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 Mutual Of America are associated (or correlated) with Nationwide Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Fund Inst has no effect on the direction of Mutual Of i.e., Mutual Of and Nationwide Fund go up and down completely randomly.

Pair Corralation between Mutual Of and Nationwide Fund

Assuming the 90 days horizon Mutual Of America is expected to under-perform the Nationwide Fund. But the mutual fund apears to be less risky and, when comparing its historical volatility, Mutual Of America is 1.46 times less risky than Nationwide Fund. The mutual fund trades about -0.36 of its potential returns per unit of risk. The Nationwide Fund Institutional is currently generating about -0.24 of returns per unit of risk over similar time horizon. If you would invest  3,519  in Nationwide Fund Institutional on October 6, 2024 and sell it today you would lose (401.00) from holding Nationwide Fund Institutional or give up 11.4% of portfolio value over 90 days.

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

Mutual Of America  vs.  Nationwide Fund Institutional

Mutual Of America

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mutual Of America has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward-looking signals, Mutual Of is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nationwide Fund Inst

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Mutual Of and Nationwide Fund

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

The idea behind Mutual Of America and Nationwide Fund 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.