Correlation Between Sp Smallcap and Nationwide Bailard

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

By analyzing existing cross correlation between Sp Smallcap 600 and Nationwide Bailard Emerging, you can compare the effects of market volatilities on Sp Smallcap and Nationwide Bailard 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 Sp Smallcap with a short position of Nationwide Bailard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sp Smallcap and Nationwide Bailard.

Diversification Opportunities for Sp Smallcap and Nationwide Bailard

0.0

Correlation Coefficient

Sp Smallcap  Nationwide Bailard

Pay attention - limited upside

The 3 months correlation between RYSVX and Nationwide is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sp Smallcap 600 and Nationwide Bailard Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Bailard and Sp Smallcap 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 Sp Smallcap 600 are associated (or correlated) with Nationwide Bailard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Bailard has no effect on the direction of Sp Smallcap i.e., Sp Smallcap and Nationwide Bailard go up and down completely randomly.

Pair Corralation between Sp Smallcap and Nationwide Bailard

If you would invest (100.00) in Nationwide Bailard Emerging on December 4, 2024 and sell it today you would earn a total of  100.00  from holding Nationwide Bailard Emerging or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Sp Smallcap 600  vs.  Nationwide Bailard Emerging

Sp Smallcap 600

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sp Smallcap 600 has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Nationwide Bailard

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Sp Smallcap and Nationwide Bailard

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

The idea behind Sp Smallcap 600 and Nationwide Bailard Emerging 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.