Correlation Between Nationwide and Wells Fargo
Can any of the company-specific risk be diversified away by investing in both Nationwide and Wells Fargo 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 and Wells Fargo into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nationwide Sp 500 and Wells Fargo Diversified, you can compare the effects of market volatilities on Nationwide and Wells Fargo 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 with a short position of Wells Fargo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide and Wells Fargo.
Diversification Opportunities for Nationwide and Wells Fargo
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nationwide and Wells is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Sp 500 and Wells Fargo Diversified in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wells Fargo Diversified and Nationwide 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 Sp 500 are associated (or correlated) with Wells Fargo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wells Fargo Diversified has no effect on the direction of Nationwide i.e., Nationwide and Wells Fargo go up and down completely randomly.
Pair Corralation between Nationwide and Wells Fargo
Assuming the 90 days horizon Nationwide is expected to generate 2.01 times less return on investment than Wells Fargo. But when comparing it to its historical volatility, Nationwide Sp 500 is 1.35 times less risky than Wells Fargo. It trades about 0.1 of its potential returns per unit of risk. Wells Fargo Diversified is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,490 in Wells Fargo Diversified on August 18, 2025 and sell it today you would earn a total of 142.00 from holding Wells Fargo Diversified or generate 9.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nationwide Sp 500 vs. Wells Fargo Diversified
Performance |
| Timeline |
| Nationwide Sp 500 |
| Wells Fargo Diversified |
Nationwide and Wells Fargo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nationwide and Wells Fargo
The main advantage of trading using opposite Nationwide and Wells Fargo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nationwide position performs unexpectedly, Wells Fargo 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 Wells Fargo will offset losses from the drop in Wells Fargo's long position.| Nationwide vs. T Rowe Price | Nationwide vs. Columbia Select Large | Nationwide vs. Ssga Sp 500 | Nationwide vs. Dreyfus Institutional Sp |
| Wells Fargo vs. Columbia Select Large | Wells Fargo vs. Ssga Sp 500 | Wells Fargo vs. Clearbridge Mid Cap | Wells Fargo vs. Dreyfus Institutional Sp |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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