Correlation Between Nationwide Bond and Conquer Risk

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

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

Diversification Opportunities for Nationwide Bond and Conquer Risk

0.27

Correlation Coefficient

Nationwide Bond  Conquer Risk

Modest diversification

The 3 months correlation between Nationwide and Conquer is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Bond Fund and Conquer Risk Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conquer Risk Managed and Nationwide Bond 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 Bond Fund are associated (or correlated) with Conquer Risk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conquer Risk Managed has no effect on the direction of Nationwide Bond i.e., Nationwide Bond and Conquer Risk go up and down completely randomly.

Pair Corralation between Nationwide Bond and Conquer Risk

Assuming the 90 days horizon Nationwide Bond Fund is expected to generate 0.75 times more return on investment than Conquer Risk. However, Nationwide Bond Fund is 1.33 times less risky than Conquer Risk. It trades about -0.11 of its potential returns per unit of risk. Conquer Risk Managed is currently generating about -0.12 per unit of risk. If you would invest  820.00  in Nationwide Bond Fund on October 6, 2024 and sell it today you would lose (12.00) from holding Nationwide Bond Fund or give up 1.46% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	97.62%
Values	Daily Returns

Nationwide Bond Fund  vs.  Conquer Risk Managed

Nationwide Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nationwide Bond Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Nationwide Bond is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Conquer Risk Managed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Conquer Risk Managed has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Conquer Risk 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 Bond and Conquer Risk

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

The idea behind Nationwide Bond Fund and Conquer Risk Managed 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.