Correlation Between Nationwide Allianzgi and Nationwide Inflation

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

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

Diversification Opportunities for Nationwide Allianzgi and Nationwide Inflation

0.85

Correlation Coefficient

Nationwide Allianzgi  Nationwide Inflation

Very poor diversification

The 3 months correlation between Nationwide and Nationwide is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Allianzgi Internati and Nationwide Inflation Protected in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Inflation and Nationwide Allianzgi 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 Allianzgi International are associated (or correlated) with Nationwide Inflation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Inflation has no effect on the direction of Nationwide Allianzgi i.e., Nationwide Allianzgi and Nationwide Inflation go up and down completely randomly.

Pair Corralation between Nationwide Allianzgi and Nationwide Inflation

Assuming the 90 days horizon Nationwide Allianzgi International is expected to under-perform the Nationwide Inflation. In addition to that, Nationwide Allianzgi is 3.65 times more volatile than Nationwide Inflation Protected Securities. It trades about -0.03 of its total potential returns per unit of risk. Nationwide Inflation Protected Securities is currently generating about 0.02 per unit of volatility. If you would invest  877.00  in Nationwide Inflation Protected Securities on September 30, 2024 and sell it today you would earn a total of  6.00  from holding Nationwide Inflation Protected Securities or generate 0.68% return on investment over 90 days.

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

Nationwide Allianzgi Internati  vs.  Nationwide Inflation Protected

Nationwide Allianzgi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nationwide Allianzgi International has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's technical indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Nationwide Inflation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nationwide Inflation Protected Securities has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Nationwide Inflation 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 Allianzgi and Nationwide Inflation

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

The idea behind Nationwide Allianzgi International and Nationwide Inflation Protected Securities 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.