Correlation Between Nationwide Fund and Nationwide Bond

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

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

Diversification Opportunities for Nationwide Fund and Nationwide Bond

0.14

Correlation Coefficient

Nationwide Fund  Nationwide Bond

Average diversification

The 3 months correlation between Nationwide and Nationwide is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Fund Institutional and Nationwide Bond Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Bond Index and Nationwide Fund 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 Fund Institutional are associated (or correlated) with Nationwide Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Bond Index has no effect on the direction of Nationwide Fund i.e., Nationwide Fund and Nationwide Bond go up and down completely randomly.

Pair Corralation between Nationwide Fund and Nationwide Bond

Assuming the 90 days horizon Nationwide Fund Institutional is expected to under-perform the Nationwide Bond. In addition to that, Nationwide Fund is 9.32 times more volatile than Nationwide Bond Index. It trades about -0.23 of its total potential returns per unit of risk. Nationwide Bond Index is currently generating about -0.45 per unit of volatility. If you would invest  966.00  in Nationwide Bond Index on October 1, 2024 and sell it today you would lose (22.00) from holding Nationwide Bond Index or give up 2.28% of portfolio value over 90 days.

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

Nationwide Fund Institutional  vs.  Nationwide Bond Index

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.

Nationwide Bond Index

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nationwide Bond Index has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Nationwide Bond 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 Fund and Nationwide Bond

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

The idea behind Nationwide Fund Institutional and Nationwide Bond Index 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.

Check out your portfolio center.

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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.