Correlation Between IShares Currency and Nationwide

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Can any of the company-specific risk be diversified away by investing in both IShares Currency and Nationwide 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 IShares Currency and Nationwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Currency Hedged and Nationwide, you can compare the effects of market volatilities on IShares Currency and Nationwide 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 IShares Currency with a short position of Nationwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Currency and Nationwide.

Diversification Opportunities for IShares Currency and Nationwide

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  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between IShares Currency and Nationwide

If you would invest  3,183  in iShares Currency Hedged on September 18, 2024 and sell it today you would earn a total of  55.08  from holding iShares Currency Hedged or generate 1.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

iShares Currency Hedged  vs.  Nationwide

 Performance 
       Timeline  
iShares Currency Hedged 

Risk-Adjusted Performance

3 of 100

 
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Modest
Compared to the overall equity markets, risk-adjusted returns on investments in iShares Currency Hedged are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental indicators, IShares Currency is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
Nationwide 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Nationwide has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Nationwide is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

IShares Currency and Nationwide Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with IShares Currency and Nationwide

The main advantage of trading using opposite IShares Currency and Nationwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Currency position performs unexpectedly, Nationwide 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 will offset losses from the drop in Nationwide's long position.
The idea behind iShares Currency Hedged and Nationwide 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.
Check out your portfolio center.
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.

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