Correlation Between Nationwide Investor and Nationwide Fund

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

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

Diversification Opportunities for Nationwide Investor and Nationwide Fund

0.9

Correlation Coefficient

Nationwide Investor  Nationwide Fund

Almost no diversification

The 3 months correlation between Nationwide and NATIONWIDE is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Investor Destinatio and Nationwide Fund Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Fund Inst and Nationwide Investor 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 Investor Destinations are associated (or correlated) with Nationwide Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Fund Inst has no effect on the direction of Nationwide Investor i.e., Nationwide Investor and Nationwide Fund go up and down completely randomly.

Pair Corralation between Nationwide Investor and Nationwide Fund

Assuming the 90 days horizon Nationwide Investor Destinations is expected to under-perform the Nationwide Fund. In addition to that, Nationwide Investor is 1.05 times more volatile than Nationwide Fund Institutional. It trades about -0.11 of its total potential returns per unit of risk. Nationwide Fund Institutional is currently generating about -0.05 per unit of volatility. If you would invest  3,360  in Nationwide Fund Institutional on October 24, 2024 and sell it today you would lose (180.00) from holding Nationwide Fund Institutional or give up 5.36% of portfolio value over 90 days.

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

Nationwide Investor Destinatio  vs.  Nationwide Fund Institutional

Nationwide Investor

Risk-Adjusted Performance

0 of 100

Very Weak

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

Nationwide Fund Inst

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nationwide Fund Institutional has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Nationwide Fund 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 Investor and Nationwide Fund

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

The idea behind Nationwide Investor Destinations and Nationwide Fund Institutional 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.