Correlation Between Nasdaq 100 and Nationwide Small
Can any of the company-specific risk be diversified away by investing in both Nasdaq 100 and Nationwide Small 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 Nasdaq 100 and Nationwide Small into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nasdaq 100 Index Fund and Nationwide Small Cap, you can compare the effects of market volatilities on Nasdaq 100 and Nationwide Small 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 Nasdaq 100 with a short position of Nationwide Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq 100 and Nationwide Small.
Diversification Opportunities for Nasdaq 100 and Nationwide Small
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Nasdaq and Nationwide is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq 100 Index Fund and Nationwide Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Small Cap and Nasdaq 100 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 Nasdaq 100 Index Fund are associated (or correlated) with Nationwide Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Small Cap has no effect on the direction of Nasdaq 100 i.e., Nasdaq 100 and Nationwide Small go up and down completely randomly.
Pair Corralation between Nasdaq 100 and Nationwide Small
Assuming the 90 days horizon Nasdaq 100 Index Fund is expected to generate 0.86 times more return on investment than Nationwide Small. However, Nasdaq 100 Index Fund is 1.17 times less risky than Nationwide Small. It trades about 0.42 of its potential returns per unit of risk. Nationwide Small Cap is currently generating about 0.28 per unit of risk. If you would invest 1,923 in Nasdaq 100 Index Fund on April 20, 2025 and sell it today you would earn a total of 570.00 from holding Nasdaq 100 Index Fund or generate 29.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.41% |
| Values | Daily Returns |
Nasdaq 100 Index Fund vs. Nationwide Small Cap
Performance |
| Timeline |
| Nasdaq 100 Index |
| Nationwide Small Cap |
Nasdaq 100 and Nationwide Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nasdaq 100 and Nationwide Small
The main advantage of trading using opposite Nasdaq 100 and Nationwide Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nasdaq 100 position performs unexpectedly, Nationwide Small 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 Small will offset losses from the drop in Nationwide Small's long position.| Nasdaq 100 vs. Lord Abbett Short | Nasdaq 100 vs. Ab High Income | Nasdaq 100 vs. Artisan High Income | Nasdaq 100 vs. Pace High Yield |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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