Correlation Between Nationwide Investor and Akre Focus

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

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

Diversification Opportunities for Nationwide Investor and Akre Focus

0.75

Correlation Coefficient

Nationwide Investor  Akre Focus

Poor diversification

The 3 months correlation between Nationwide and Akre is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Investor Destinatio and Akre Focus Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akre Focus Fund and Nationwide Investor 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 Investor Destinations are associated (or correlated) with Akre Focus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akre Focus Fund has no effect on the direction of Nationwide Investor i.e., Nationwide Investor and Akre Focus go up and down completely randomly.

Pair Corralation between Nationwide Investor and Akre Focus

Assuming the 90 days horizon Nationwide Investor Destinations is expected to generate 0.59 times more return on investment than Akre Focus. However, Nationwide Investor Destinations is 1.71 times less risky than Akre Focus. It trades about 0.15 of its potential returns per unit of risk. Akre Focus Fund is currently generating about 0.0 per unit of risk. If you would invest  1,027  in Nationwide Investor Destinations on September 12, 2024 and sell it today you would earn a total of  52.00  from holding Nationwide Investor Destinations or generate 5.06% return on investment over 90 days.

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

Nationwide Investor Destinatio  vs.  Akre Focus Fund

Nationwide Investor

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nationwide Investor Destinations are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Nationwide Investor is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Akre Focus Fund

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Akre Focus Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Akre Focus 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 Investor and Akre Focus

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

The idea behind Nationwide Investor Destinations and Akre Focus Fund 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.