Correlation Between Nationwide Fund and Nationwide Highmark

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

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

Diversification Opportunities for Nationwide Fund and Nationwide Highmark

-0.66

Correlation Coefficient

Nationwide Fund  Nationwide Highmark

Excellent diversification

The 3 months correlation between Nationwide and Nationwide is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Fund Class and Nationwide Highmark Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Highmark Bond and Nationwide Fund 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 Fund Class are associated (or correlated) with Nationwide Highmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Highmark Bond has no effect on the direction of Nationwide Fund i.e., Nationwide Fund and Nationwide Highmark go up and down completely randomly.

Pair Corralation between Nationwide Fund and Nationwide Highmark

Assuming the 90 days horizon Nationwide Fund Class is expected to generate 2.28 times more return on investment than Nationwide Highmark. However, Nationwide Fund is 2.28 times more volatile than Nationwide Highmark Bond. It trades about 0.17 of its potential returns per unit of risk. Nationwide Highmark Bond is currently generating about -0.09 per unit of risk. If you would invest  3,346  in Nationwide Fund Class on September 12, 2024 and sell it today you would earn a total of  251.00  from holding Nationwide Fund Class or generate 7.5% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Nationwide Fund Class  vs.  Nationwide Highmark Bond

Nationwide Fund Class

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nationwide Fund Class are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Nationwide Fund may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Nationwide Highmark Bond

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Nationwide Fund and Nationwide Highmark

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

The idea behind Nationwide Fund Class and Nationwide Highmark Bond 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.