Correlation Between Advantage Portfolio and Nationwide Bailard

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

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

Diversification Opportunities for Advantage Portfolio and Nationwide Bailard

0.63

Correlation Coefficient

Advantage Portfolio  Nationwide Bailard

Poor diversification

The 3 months correlation between Advantage and Nationwide is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Advantage Portfolio Class and Nationwide Bailard Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Bailard and Advantage Portfolio 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 Advantage Portfolio Class are associated (or correlated) with Nationwide Bailard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nationwide Bailard has no effect on the direction of Advantage Portfolio i.e., Advantage Portfolio and Nationwide Bailard go up and down completely randomly.

Pair Corralation between Advantage Portfolio and Nationwide Bailard

Assuming the 90 days horizon Advantage Portfolio is expected to generate 1.07 times less return on investment than Nationwide Bailard. In addition to that, Advantage Portfolio is 1.11 times more volatile than Nationwide Bailard Technology. It trades about 0.22 of its total potential returns per unit of risk. Nationwide Bailard Technology is currently generating about 0.26 per unit of volatility. If you would invest  2,505  in Nationwide Bailard Technology on May 4, 2025 and sell it today you would earn a total of  460.00  from holding Nationwide Bailard Technology or generate 18.36% return on investment over 90 days.

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

Advantage Portfolio Class  vs.  Nationwide Bailard Technology

Advantage Portfolio Class

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Advantage Portfolio Class are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Advantage Portfolio showed solid returns over the last few months and may actually be approaching a breakup point.

Nationwide Bailard

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Nationwide Bailard Technology are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Nationwide Bailard showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Advantage Portfolio and Nationwide Bailard

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

The idea behind Advantage Portfolio Class and Nationwide Bailard Technology 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.