Correlation Between Bright Rock and Wilmington Multi
Can any of the company-specific risk be diversified away by investing in both Bright Rock and Wilmington Multi 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 Bright Rock and Wilmington Multi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bright Rock Mid and Wilmington Multi Manager Real, you can compare the effects of market volatilities on Bright Rock and Wilmington Multi 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 Bright Rock with a short position of Wilmington Multi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bright Rock and Wilmington Multi.
Diversification Opportunities for Bright Rock and Wilmington Multi
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bright and Wilmington is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Bright Rock Mid and Wilmington Multi Manager Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmington Multi Man and Bright Rock 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 Bright Rock Mid are associated (or correlated) with Wilmington Multi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmington Multi Man has no effect on the direction of Bright Rock i.e., Bright Rock and Wilmington Multi go up and down completely randomly.
Pair Corralation between Bright Rock and Wilmington Multi
Assuming the 90 days horizon Bright Rock Mid is expected to generate 1.38 times more return on investment than Wilmington Multi. However, Bright Rock is 1.38 times more volatile than Wilmington Multi Manager Real. It trades about 0.05 of its potential returns per unit of risk. Wilmington Multi Manager Real is currently generating about 0.04 per unit of risk. If you would invest 2,715 in Bright Rock Mid on September 12, 2024 and sell it today you would earn a total of 20.00 from holding Bright Rock Mid or generate 0.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bright Rock Mid vs. Wilmington Multi Manager Real
Performance |
| Timeline |
| Bright Rock Mid |
| Wilmington Multi Man |
Bright Rock and Wilmington Multi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bright Rock and Wilmington Multi
The main advantage of trading using opposite Bright Rock and Wilmington Multi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bright Rock position performs unexpectedly, Wilmington Multi 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 Wilmington Multi will offset losses from the drop in Wilmington Multi's long position.| Bright Rock vs. Schwab Government Money | Bright Rock vs. Hsbc Government Money | Bright Rock vs. Dreyfus Government Cash | Bright Rock vs. Sit Government Securities |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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