Correlation Between Unconstrained Emerging and Nationwide Fund

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

By analyzing existing cross correlation between Unconstrained Emerging Markets and Nationwide Fund Class, you can compare the effects of market volatilities on Unconstrained Emerging and Nationwide Fund 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 Unconstrained Emerging with a short position of Nationwide Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Unconstrained Emerging and Nationwide Fund.

Diversification Opportunities for Unconstrained Emerging and Nationwide Fund

0.95

Correlation Coefficient

Unconstrained Emerging  Nationwide Fund

Almost no diversification

The 3 months correlation between Unconstrained and NATIONWIDE is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Unconstrained Emerging Markets and Nationwide Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Fund Class and Unconstrained Emerging 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 Unconstrained Emerging Markets are associated (or correlated) with Nationwide Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Fund Class has no effect on the direction of Unconstrained Emerging i.e., Unconstrained Emerging and Nationwide Fund go up and down completely randomly.

Pair Corralation between Unconstrained Emerging and Nationwide Fund

Assuming the 90 days horizon Unconstrained Emerging is expected to generate 1.6 times less return on investment than Nationwide Fund. But when comparing it to its historical volatility, Unconstrained Emerging Markets is 2.41 times less risky than Nationwide Fund. It trades about 0.37 of its potential returns per unit of risk. Nationwide Fund Class is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  3,014  in Nationwide Fund Class on May 21, 2025 and sell it today you would earn a total of  294.00  from holding Nationwide Fund Class or generate 9.75% return on investment over 90 days.

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

Unconstrained Emerging Markets  vs.  Nationwide Fund Class

Unconstrained Emerging

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Unconstrained Emerging Markets are ranked lower than 29 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Unconstrained Emerging is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Nationwide Fund Class

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nationwide Fund Class are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Nationwide Fund may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Unconstrained Emerging and Nationwide Fund

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

The idea behind Unconstrained Emerging Markets and Nationwide Fund Class 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.