Correlation Between Matson Money and Wellington Shields
Can any of the company-specific risk be diversified away by investing in both Matson Money and Wellington Shields 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 Wellington Shields 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 Wellington Shields All Cap, you can compare the effects of market volatilities on Matson Money and Wellington Shields 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 Wellington Shields. Check out your portfolio center. Please also check ongoing floating volatility patterns of Matson Money and Wellington Shields.
Diversification Opportunities for Matson Money and Wellington Shields
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Matson and Wellington is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Matson Money Equity and Wellington Shields All Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wellington Shields All 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 Wellington Shields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wellington Shields All has no effect on the direction of Matson Money i.e., Matson Money and Wellington Shields go up and down completely randomly.
Pair Corralation between Matson Money and Wellington Shields
Assuming the 90 days horizon Matson Money Equity is expected to under-perform the Wellington Shields. But the mutual fund apears to be less risky and, when comparing its historical volatility, Matson Money Equity is 1.15 times less risky than Wellington Shields. The mutual fund trades about -0.04 of its potential returns per unit of risk. The Wellington Shields All Cap is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2,970 in Wellington Shields All Cap on September 14, 2024 and sell it today you would earn a total of 45.00 from holding Wellington Shields All Cap or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Matson Money Equity vs. Wellington Shields All Cap
Performance |
| Timeline |
| Matson Money Equity |
| Wellington Shields All |
Matson Money and Wellington Shields Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Matson Money and Wellington Shields
The main advantage of trading using opposite Matson Money and Wellington Shields positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Matson Money position performs unexpectedly, Wellington Shields 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 Wellington Shields will offset losses from the drop in Wellington Shields' long position.| Matson Money vs. Fidelity Managed Retirement | Matson Money vs. Jpmorgan Smartretirement 2035 | Matson Money vs. Pro Blend Moderate Term | Matson Money vs. Putnman Retirement Ready |
| Wellington Shields vs. T Rowe Price | Wellington Shields vs. T Rowe Price | Wellington Shields vs. Volumetric Fund Volumetric | Wellington Shields vs. Ab Small Cap |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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