Correlation Between Nationwide Destination and College Retirement

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Can any of the company-specific risk be diversified away by investing in both Nationwide Destination and College Retirement 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 Destination and College Retirement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide Destination 2055 and College Retirement Equities, you can compare the effects of market volatilities on Nationwide Destination and College Retirement 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 Destination with a short position of College Retirement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Destination and College Retirement.

Diversification Opportunities for Nationwide Destination and College Retirement

NationwideCollegeDiversified AwayNationwideCollegeDiversified Away100%
0.09
  Correlation Coefficient

Significant diversification

The 3 months correlation between Nationwide and College is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Destination 2055 and College Retirement Equities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on College Retirement and Nationwide Destination 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 Destination 2055 are associated (or correlated) with College Retirement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of College Retirement has no effect on the direction of Nationwide Destination i.e., Nationwide Destination and College Retirement go up and down completely randomly.

Pair Corralation between Nationwide Destination and College Retirement

Assuming the 90 days horizon Nationwide Destination 2055 is expected to under-perform the College Retirement. In addition to that, Nationwide Destination is 2.03 times more volatile than College Retirement Equities. It trades about -0.08 of its total potential returns per unit of risk. College Retirement Equities is currently generating about 0.1 per unit of volatility. If you would invest  34,055  in College Retirement Equities on November 18, 2024 and sell it today you would earn a total of  1,625  from holding College Retirement Equities or generate 4.77% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Nationwide Destination 2055  vs.  College Retirement Equities

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -15-10-50
JavaScript chart by amCharts 3.21.15NTDAX QCGLRX
       Timeline  
Nationwide Destination 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Nationwide Destination 2055 has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1313.51414.51515.5
College Retirement 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in College Retirement Equities are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, College Retirement is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb340345350355

Nationwide Destination and College Retirement Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.54-1.93-1.32-0.71-0.09490.451.031.612.192.77 0.10.20.30.40.50.6
JavaScript chart by amCharts 3.21.15NTDAX QCGLRX
       Returns  

Pair Trading with Nationwide Destination and College Retirement

The main advantage of trading using opposite Nationwide Destination and College Retirement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Destination position performs unexpectedly, College Retirement 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 College Retirement will offset losses from the drop in College Retirement's long position.
The idea behind Nationwide Destination 2055 and College Retirement Equities 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 Stocks Directory module to find actively traded stocks across global markets.

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