Correlation Between Nationwide Fund and Siit Ultra

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

Diversification Opportunities for Nationwide Fund and Siit Ultra

0.78

Correlation Coefficient

Nationwide Fund  Siit Ultra

Poor diversification

The 3 months correlation between Nationwide and Siit is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Fund Institutional and Siit Ultra Short in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Ultra Short 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 Siit Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Ultra Short has no effect on the direction of Nationwide Fund i.e., Nationwide Fund and Siit Ultra go up and down completely randomly.

Pair Corralation between Nationwide Fund and Siit Ultra

If you would invest  3,313  in Nationwide Fund Institutional on September 5, 2024 and sell it today you would earn a total of  192.00  from holding Nationwide Fund Institutional or generate 5.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Nationwide Fund Institutional  vs.  Siit Ultra Short

Nationwide Fund Inst

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nationwide Fund Institutional are ranked lower than 15 (%) 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.

Siit Ultra Short

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Siit Ultra Short are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Siit Ultra 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 Siit Ultra

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

The idea behind Nationwide Fund Institutional and Siit Ultra Short 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .