Correlation Between Nationwide Inflation and Guidepath(r) Managed

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

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

Diversification Opportunities for Nationwide Inflation and Guidepath(r) Managed

-0.41

Correlation Coefficient

Nationwide Inflation  Guidepath(r) Managed

Very good diversification

The 3 months correlation between Nationwide and Guidepath(r) is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Inflation Protected and Guidepath Managed Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guidepath Managed Futures and Nationwide Inflation 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 Inflation Protected Securities are associated (or correlated) with Guidepath(r) Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guidepath Managed Futures has no effect on the direction of Nationwide Inflation i.e., Nationwide Inflation and Guidepath(r) Managed go up and down completely randomly.

Pair Corralation between Nationwide Inflation and Guidepath(r) Managed

Assuming the 90 days horizon Nationwide Inflation Protected Securities is expected to under-perform the Guidepath(r) Managed. But the mutual fund apears to be less risky and, when comparing its historical volatility, Nationwide Inflation Protected Securities is 2.36 times less risky than Guidepath(r) Managed. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Guidepath Managed Futures is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  779.00  in Guidepath Managed Futures on October 25, 2024 and sell it today you would earn a total of  13.00  from holding Guidepath Managed Futures or generate 1.67% return on investment over 90 days.

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

Nationwide Inflation Protected  vs.  Guidepath Managed Futures

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 basic indicators, Nationwide Inflation is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Guidepath Managed Futures

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Guidepath Managed Futures are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Guidepath(r) Managed 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 Inflation and Guidepath(r) Managed

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

The idea behind Nationwide Inflation Protected Securities and Guidepath Managed Futures 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.