Correlation Between Great West and Wilmington International
Can any of the company-specific risk be diversified away by investing in both Great West and Wilmington International 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 Great West and Wilmington International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great West Goldman Sachs and Wilmington International Fund, you can compare the effects of market volatilities on Great West and Wilmington International 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 Great West with a short position of Wilmington International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great West and Wilmington International.
Diversification Opportunities for Great West and Wilmington International
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Great and Wilmington is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Great West Goldman Sachs and Wilmington International Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmington International and Great West 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 Great West Goldman Sachs are associated (or correlated) with Wilmington International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmington International has no effect on the direction of Great West i.e., Great West and Wilmington International go up and down completely randomly.
Pair Corralation between Great West and Wilmington International
Assuming the 90 days horizon Great West Goldman Sachs is expected to generate 1.01 times more return on investment than Wilmington International. However, Great West is 1.01 times more volatile than Wilmington International Fund. It trades about 0.18 of its potential returns per unit of risk. Wilmington International Fund is currently generating about 0.0 per unit of risk. If you would invest 930.00 in Great West Goldman Sachs on September 12, 2024 and sell it today you would earn a total of 81.00 from holding Great West Goldman Sachs or generate 8.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great West Goldman Sachs vs. Wilmington International Fund
Performance |
| Timeline |
| Great West Goldman |
| Wilmington International |
Great West and Wilmington International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great West and Wilmington International
The main advantage of trading using opposite Great West and Wilmington International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great West position performs unexpectedly, Wilmington International 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 International will offset losses from the drop in Wilmington International's long position.| Great West vs. Fm Investments Large | Great West vs. Pace Large Growth | Great West vs. T Rowe Price | Great West vs. Aqr Large 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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