Correlation Between Nationwide Allianzgi and Champlain Small

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

Diversification Opportunities for Nationwide Allianzgi and Champlain Small

-0.61

Correlation Coefficient

Nationwide Allianzgi  Champlain Small

Excellent diversification

The 3 months correlation between Nationwide and Champlain is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Allianzgi Internati and Champlain Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champlain Small 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 Champlain Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champlain Small has no effect on the direction of Nationwide Allianzgi i.e., Nationwide Allianzgi and Champlain Small go up and down completely randomly.

Pair Corralation between Nationwide Allianzgi and Champlain Small

Assuming the 90 days horizon Nationwide Allianzgi International is expected to under-perform the Champlain Small. But the mutual fund apears to be less risky and, when comparing its historical volatility, Nationwide Allianzgi International is 1.38 times less risky than Champlain Small. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Champlain Small is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  2,241  in Champlain Small on September 12, 2024 and sell it today you would earn a total of  316.00  from holding Champlain Small or generate 14.1% return on investment over 90 days.

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

Nationwide Allianzgi Internati  vs.  Champlain Small

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 fairly strong forward-looking indicators, Nationwide Allianzgi is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Champlain Small

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Champlain Small are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Champlain Small showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nationwide Allianzgi and Champlain Small

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

The idea behind Nationwide Allianzgi International and Champlain Small 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.