Correlation Between Global Diversified and Nationwide Loomis

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

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

Diversification Opportunities for Global Diversified and Nationwide Loomis

-0.47

Correlation Coefficient

Global Diversified  Nationwide Loomis

Very good diversification

The 3 months correlation between Global and Nationwide is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Global Diversified Income and Nationwide Loomis All in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Loomis All and Global Diversified 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 Global Diversified Income are associated (or correlated) with Nationwide Loomis. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Loomis All has no effect on the direction of Global Diversified i.e., Global Diversified and Nationwide Loomis go up and down completely randomly.

Pair Corralation between Global Diversified and Nationwide Loomis

Assuming the 90 days horizon Global Diversified is expected to generate 1228.5 times less return on investment than Nationwide Loomis. But when comparing it to its historical volatility, Global Diversified Income is 5.12 times less risky than Nationwide Loomis. It trades about 0.0 of its potential returns per unit of risk. Nationwide Loomis All is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  1,855  in Nationwide Loomis All on September 12, 2024 and sell it today you would earn a total of  304.00  from holding Nationwide Loomis All or generate 16.39% return on investment over 90 days.

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

Global Diversified Income  vs.  Nationwide Loomis All

Global Diversified Income

Risk-Adjusted Performance

0 of 100

Very Weak

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

Nationwide Loomis All

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nationwide Loomis All are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Nationwide Loomis showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global Diversified and Nationwide Loomis

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

The idea behind Global Diversified Income and Nationwide Loomis All 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.