Correlation Between Nicholas and Wasatch International
Can any of the company-specific risk be diversified away by investing in both Nicholas and Wasatch International 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 Nicholas and Wasatch International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nicholas Ltd Edition and Wasatch International Opportunities, you can compare the effects of market volatilities on Nicholas and Wasatch International 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 Nicholas with a short position of Wasatch International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nicholas and Wasatch International.
Diversification Opportunities for Nicholas and Wasatch International
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Nicholas and Wasatch is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Nicholas Ltd Edition and Wasatch International Opportun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wasatch International and Nicholas 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 Nicholas Ltd Edition are associated (or correlated) with Wasatch International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wasatch International has no effect on the direction of Nicholas i.e., Nicholas and Wasatch International go up and down completely randomly.
Pair Corralation between Nicholas and Wasatch International
Assuming the 90 days horizon Nicholas Ltd Edition is expected to generate 1.62 times more return on investment than Wasatch International. However, Nicholas is 1.62 times more volatile than Wasatch International Opportunities. It trades about -0.08 of its potential returns per unit of risk. Wasatch International Opportunities is currently generating about -0.2 per unit of risk. If you would invest 2,525 in Nicholas Ltd Edition on August 14, 2025 and sell it today you would lose (142.00) from holding Nicholas Ltd Edition or give up 5.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nicholas Ltd Edition vs. Wasatch International Opportun
Performance |
| Timeline |
| Nicholas Edition |
| Wasatch International |
Nicholas and Wasatch International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nicholas and Wasatch International
The main advantage of trading using opposite Nicholas and Wasatch International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nicholas position performs unexpectedly, Wasatch International 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 Wasatch International will offset losses from the drop in Wasatch International's long position.| Nicholas vs. Wasatch Micro Cap | Nicholas vs. James Balanced Golden | Nicholas vs. Fidelity Japan Smaller | Nicholas vs. Growth Fund Growth |
| Wasatch International vs. Wasatch Micro Cap | Wasatch International vs. Wasatch Emerging India | Wasatch International vs. Wasatch Micro Cap | Wasatch International vs. Fidelity Freedom Blend |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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