Correlation Between Nationwide Building and Synergia Energy

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

By analyzing existing cross correlation between Nationwide Building Society and Synergia Energy, you can compare the effects of market volatilities on Nationwide Building and Synergia Energy 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 Nationwide Building with a short position of Synergia Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nationwide Building and Synergia Energy.

Diversification Opportunities for Nationwide Building and Synergia Energy

-0.53

Correlation Coefficient

Nationwide Building  Synergia Energy

Excellent diversification

The 3 months correlation between Nationwide and Synergia is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Nationwide Building Society and Synergia Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synergia Energy and Nationwide Building 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 Nationwide Building Society are associated (or correlated) with Synergia Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synergia Energy has no effect on the direction of Nationwide Building i.e., Nationwide Building and Synergia Energy go up and down completely randomly.

Pair Corralation between Nationwide Building and Synergia Energy

Assuming the 90 days trading horizon Nationwide Building Society is expected to under-perform the Synergia Energy. But the stock apears to be less risky and, when comparing its historical volatility, Nationwide Building Society is 60.88 times less risky than Synergia Energy. The stock trades about -0.05 of its potential returns per unit of risk. The Synergia Energy is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  1.95  in Synergia Energy on April 25, 2025 and sell it today you would earn a total of  0.15  from holding Synergia Energy or generate 7.69% return on investment over 90 days.

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

Nationwide Building Society  vs.  Synergia Energy

Nationwide Building

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nationwide Building Society has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Nationwide Building is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Synergia Energy

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Synergia Energy are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Synergia Energy exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Nationwide Building and Synergia Energy

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

The idea behind Nationwide Building Society and Synergia Energy 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.