Correlation Between Nationwide and NEOS ETF

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

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

Diversification Opportunities for Nationwide and NEOS ETF

0.84

Correlation Coefficient

Nationwide  NEOS ETF

Very poor diversification

The 3 months correlation between Nationwide and NEOS is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide and NEOS ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEOS ETF Trust and Nationwide 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 are associated (or correlated) with NEOS ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEOS ETF Trust has no effect on the direction of Nationwide i.e., Nationwide and NEOS ETF go up and down completely randomly.

Pair Corralation between Nationwide and NEOS ETF

If you would invest  2,501  in NEOS ETF Trust on September 29, 2024 and sell it today you would earn a total of  132.00  from holding NEOS ETF Trust or generate 5.28% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	1.59%
Values	Daily Returns

Nationwide  vs.  NEOS ETF Trust

Nationwide

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nationwide has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Nationwide is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

NEOS ETF Trust

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NEOS ETF Trust are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, NEOS ETF is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Nationwide and NEOS ETF

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

The idea behind Nationwide and NEOS ETF Trust 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.