Correlation Between Nationwide Nasdaq and IShares Core

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Nationwide Nasdaq and IShares Core 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 Nasdaq and IShares Core into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide Nasdaq 100 Risk Managed and iShares Core Moderate, you can compare the effects of market volatilities on Nationwide Nasdaq and IShares Core 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 Nasdaq with a short position of IShares Core. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Nasdaq and IShares Core.

Diversification Opportunities for Nationwide Nasdaq and IShares Core

0.64
  Correlation Coefficient

Poor diversification

The 3 months correlation between Nationwide and IShares is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Nasdaq 100 Risk Man and iShares Core Moderate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iShares Core Moderate and Nationwide Nasdaq 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 Nasdaq 100 Risk Managed are associated (or correlated) with IShares Core. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iShares Core Moderate has no effect on the direction of Nationwide Nasdaq i.e., Nationwide Nasdaq and IShares Core go up and down completely randomly.

Pair Corralation between Nationwide Nasdaq and IShares Core

Given the investment horizon of 90 days Nationwide Nasdaq 100 Risk Managed is expected to generate 1.76 times more return on investment than IShares Core. However, Nationwide Nasdaq is 1.76 times more volatile than iShares Core Moderate. It trades about 0.12 of its potential returns per unit of risk. iShares Core Moderate is currently generating about 0.1 per unit of risk. If you would invest  1,675  in Nationwide Nasdaq 100 Risk Managed on July 7, 2024 and sell it today you would earn a total of  877.00  from holding Nationwide Nasdaq 100 Risk Managed or generate 52.36% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Nationwide Nasdaq 100 Risk Man  vs.  iShares Core Moderate

 Performance 
       Timeline  
Nationwide Nasdaq 100 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Nationwide Nasdaq 100 Risk Managed are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Nationwide Nasdaq is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.
iShares Core Moderate 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in iShares Core Moderate are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, IShares Core is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Nationwide Nasdaq and IShares Core Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Nationwide Nasdaq and IShares Core

The main advantage of trading using opposite Nationwide Nasdaq and IShares Core positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide Nasdaq position performs unexpectedly, IShares Core 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 IShares Core will offset losses from the drop in IShares Core's long position.
The idea behind Nationwide Nasdaq 100 Risk Managed and iShares Core Moderate 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

Other Complementary Tools

Analyst Advice
Analyst recommendations and target price estimates broken down by several categories
Equity Valuation
Check real value of public entities based on technical and fundamental data
ETF Categories
List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope