Correlation Between Nationwide Global and Us Strategic

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

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

Diversification Opportunities for Nationwide Global and Us Strategic

0.78

Correlation Coefficient

Nationwide Global  Us Strategic

Poor diversification

The 3 months correlation between NATIONWIDE and RUSTX is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Global Equity and Us Strategic Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Strategic Equity and Nationwide Global 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 Global Equity are associated (or correlated) with Us Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Strategic Equity has no effect on the direction of Nationwide Global i.e., Nationwide Global and Us Strategic go up and down completely randomly.

Pair Corralation between Nationwide Global and Us Strategic

Assuming the 90 days horizon Nationwide Global is expected to generate 2.51 times less return on investment than Us Strategic. In addition to that, Nationwide Global is 1.05 times more volatile than Us Strategic Equity. It trades about 0.05 of its total potential returns per unit of risk. Us Strategic Equity is currently generating about 0.12 per unit of volatility. If you would invest  1,674  in Us Strategic Equity on September 3, 2024 and sell it today you would earn a total of  217.00  from holding Us Strategic Equity or generate 12.96% return on investment over 90 days.

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

Nationwide Global Equity  vs.  Us Strategic Equity

Nationwide Global Equity

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Nationwide Global Equity are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Nationwide Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Us Strategic Equity

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Us Strategic Equity are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Us Strategic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Nationwide Global and Us Strategic

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

The idea behind Nationwide Global Equity and Us Strategic Equity 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.