Correlation Between Matson Money and Wilmington Funds
Can any of the company-specific risk be diversified away by investing in both Matson Money and Wilmington Funds 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 Matson Money and Wilmington Funds into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Matson Money Equity and Wilmington Funds , you can compare the effects of market volatilities on Matson Money and Wilmington Funds 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 Matson Money with a short position of Wilmington Funds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matson Money and Wilmington Funds.
Diversification Opportunities for Matson Money and Wilmington Funds
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Matson and Wilmington is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Matson Money Equity and Wilmington Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmington Funds and Matson Money 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 Matson Money Equity are associated (or correlated) with Wilmington Funds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmington Funds has no effect on the direction of Matson Money i.e., Matson Money and Wilmington Funds go up and down completely randomly.
Pair Corralation between Matson Money and Wilmington Funds
Assuming the 90 days horizon Matson Money Equity is expected to generate 7.33 times more return on investment than Wilmington Funds. However, Matson Money is 7.33 times more volatile than Wilmington Funds . It trades about 0.11 of its potential returns per unit of risk. Wilmington Funds is currently generating about 0.13 per unit of risk. If you would invest 2,803 in Matson Money Equity on September 4, 2024 and sell it today you would earn a total of 984.00 from holding Matson Money Equity or generate 35.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.66% |
| Values | Daily Returns |
Matson Money Equity vs. Wilmington Funds
Performance |
| Timeline |
| Matson Money Equity |
| Wilmington Funds |
Matson Money and Wilmington Funds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matson Money and Wilmington Funds
The main advantage of trading using opposite Matson Money and Wilmington Funds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matson Money position performs unexpectedly, Wilmington Funds 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 Funds will offset losses from the drop in Wilmington Funds' long position.| Matson Money vs. Western Asset High | Matson Money vs. T Rowe Price | Matson Money vs. Siit High Yield | Matson Money vs. Calvert High Yield |
| Wilmington Funds vs. Vanguard Total Stock | Wilmington Funds vs. Vanguard 500 Index | Wilmington Funds vs. Vanguard Total Stock | Wilmington Funds vs. Vanguard Total Stock |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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