Correlation Between Western Asset and Nationwide Geneva

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

By analyzing existing cross correlation between Western Asset E and Nationwide Geneva Small, you can compare the effects of market volatilities on Western Asset and Nationwide Geneva 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 Western Asset with a short position of Nationwide Geneva. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Asset and Nationwide Geneva.

Diversification Opportunities for Western Asset and Nationwide Geneva

0.0

Correlation Coefficient

Western Asset  Nationwide Geneva

Pay attention - limited upside

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

Pair Corralation between Western Asset and Nationwide Geneva

If you would invest  895.00  in Western Asset E on December 24, 2024 and sell it today you would earn a total of  31.00  from holding Western Asset E or generate 3.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

Western Asset E  vs.  Nationwide Geneva Small

Western Asset E

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Western Asset E are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Western Asset is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nationwide Geneva Small

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Western Asset and Nationwide Geneva

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

The idea behind Western Asset E and Nationwide Geneva Small 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 Stocks Directory module to find actively traded stocks across global markets.