Correlation Between Vanguard Total and Nationwide Fund

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

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

Diversification Opportunities for Vanguard Total and Nationwide Fund

0.81

Correlation Coefficient

Vanguard Total  Nationwide Fund

Very poor diversification

The 3 months correlation between Vanguard and Nationwide is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Total Stock and Nationwide Fund Institutional in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nationwide Fund Inst and Vanguard Total 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 Vanguard Total Stock 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 Inst has no effect on the direction of Vanguard Total i.e., Vanguard Total and Nationwide Fund go up and down completely randomly.

Pair Corralation between Vanguard Total and Nationwide Fund

Assuming the 90 days horizon Vanguard Total Stock is expected to generate 1.09 times more return on investment than Nationwide Fund. However, Vanguard Total is 1.09 times more volatile than Nationwide Fund Institutional. It trades about 0.24 of its potential returns per unit of risk. Nationwide Fund Institutional is currently generating about 0.2 per unit of risk. If you would invest  13,453  in Vanguard Total Stock on May 5, 2025 and sell it today you would earn a total of  1,682  from holding Vanguard Total Stock or generate 12.5% return on investment over 90 days.

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

Vanguard Total Stock  vs.  Nationwide Fund Institutional

Vanguard Total Stock

Risk-Adjusted Performance

Solid

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

Nationwide Fund Inst

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nationwide Fund Institutional are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Nationwide Fund may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Vanguard Total and Nationwide Fund

The main advantage of trading using opposite Vanguard Total and Nationwide Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Total 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 Vanguard Total Stock and Nationwide Fund Institutional 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.