Correlation Between Big Rock and Wilmington Capital
Can any of the company-specific risk be diversified away by investing in both Big Rock and Wilmington Capital 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 Big Rock and Wilmington Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Big Rock Brewery and Wilmington Capital Management, you can compare the effects of market volatilities on Big Rock and Wilmington Capital 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 Big Rock with a short position of Wilmington Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Big Rock and Wilmington Capital.
Diversification Opportunities for Big Rock and Wilmington Capital
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Big and Wilmington is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Big Rock Brewery and Wilmington Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmington Capital and Big 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 Big Rock Brewery are associated (or correlated) with Wilmington Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmington Capital has no effect on the direction of Big Rock i.e., Big Rock and Wilmington Capital go up and down completely randomly.
Pair Corralation between Big Rock and Wilmington Capital
Assuming the 90 days horizon Big Rock Brewery is expected to generate 27.8 times more return on investment than Wilmington Capital. However, Big Rock is 27.8 times more volatile than Wilmington Capital Management. It trades about 0.08 of its potential returns per unit of risk. Wilmington Capital Management is currently generating about -0.22 per unit of risk. If you would invest 112.00 in Big Rock Brewery on October 20, 2024 and sell it today you would earn a total of 4.00 from holding Big Rock Brewery or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Big Rock Brewery vs. Wilmington Capital Management
Performance |
| Timeline |
| Big Rock Brewery |
| Wilmington Capital |
Big Rock and Wilmington Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Big Rock and Wilmington Capital
The main advantage of trading using opposite Big Rock and Wilmington Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Big Rock position performs unexpectedly, Wilmington Capital 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 Capital will offset losses from the drop in Wilmington Capital's long position.| Big Rock vs. Corby Spirit and | Big Rock vs. Gamehost | Big Rock vs. Andrew Peller Limited | Big Rock vs. Buhler Industries |
| Wilmington Capital vs. Pace Metals | Wilmington Capital vs. 2028 Investment Grade | Wilmington Capital vs. Brookfield Investments | Wilmington Capital vs. Magna Mining |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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