Correlation Between Nationwide Fund and Nationwide International

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

Diversification Opportunities for Nationwide Fund and Nationwide International

-0.57

Correlation Coefficient

Nationwide Fund  Nationwide International

Excellent diversification

The 3 months correlation between Nationwide and Nationwide is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Fund Institutional and Nationwide International Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide International 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 International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide International has no effect on the direction of Nationwide Fund i.e., Nationwide Fund and Nationwide International go up and down completely randomly.

Pair Corralation between Nationwide Fund and Nationwide International

Assuming the 90 days horizon Nationwide Fund Institutional is expected to generate 0.92 times more return on investment than Nationwide International. However, Nationwide Fund Institutional is 1.09 times less risky than Nationwide International. It trades about 0.18 of its potential returns per unit of risk. Nationwide International Index is currently generating about -0.06 per unit of risk. If you would invest  3,211  in Nationwide Fund Institutional on September 2, 2024 and sell it today you would earn a total of  284.00  from holding Nationwide Fund Institutional or generate 8.84% return on investment over 90 days.

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

Nationwide Fund Institutional  vs.  Nationwide International Index

Nationwide Fund Inst

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nationwide Fund Institutional are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Nationwide Fund may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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.

Pair Trading with Nationwide Fund and Nationwide International

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

The idea behind Nationwide Fund Institutional and Nationwide International 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.