Correlation Between Firsthand Technology and Nationwide Fund

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

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

Diversification Opportunities for Firsthand Technology and Nationwide Fund

0.96

Correlation Coefficient

Firsthand Technology  Nationwide Fund

Almost no diversification

The 3 months correlation between Firsthand and Nationwide is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Firsthand Technology Opportuni 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 Firsthand Technology 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 Firsthand Technology Opportunities 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 Firsthand Technology i.e., Firsthand Technology and Nationwide Fund go up and down completely randomly.

Pair Corralation between Firsthand Technology and Nationwide Fund

Assuming the 90 days horizon Firsthand Technology Opportunities is expected to under-perform the Nationwide Fund. In addition to that, Firsthand Technology is 1.99 times more volatile than Nationwide Fund Institutional. It trades about -0.03 of its total potential returns per unit of risk. Nationwide Fund Institutional is currently generating about 0.11 per unit of volatility. If you would invest  2,848  in Nationwide Fund Institutional on September 13, 2024 and sell it today you would earn a total of  676.00  from holding Nationwide Fund Institutional or generate 23.74% return on investment over 90 days.

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

Firsthand Technology Opportuni  vs.  Nationwide Fund Institutional

Firsthand Technology

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Firsthand Technology Opportunities are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Firsthand Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Nationwide Fund Inst

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nationwide Fund Institutional are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Nationwide Fund may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Firsthand Technology and Nationwide Fund

The main advantage of trading using opposite Firsthand Technology and Nationwide Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firsthand Technology 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 Firsthand Technology Opportunities 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.