Correlation Between Cref Money and Wilshire International
Can any of the company-specific risk be diversified away by investing in both Cref Money and Wilshire 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 Cref Money and Wilshire International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cref Money Market and Wilshire International Equity, you can compare the effects of market volatilities on Cref Money and Wilshire 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 Cref Money with a short position of Wilshire International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cref Money and Wilshire International.
Diversification Opportunities for Cref Money and Wilshire International
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Cref and Wilshire is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Cref Money Market and Wilshire International Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilshire International and Cref 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 Cref Money Market are associated (or correlated) with Wilshire International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilshire International has no effect on the direction of Cref Money i.e., Cref Money and Wilshire International go up and down completely randomly.
Pair Corralation between Cref Money and Wilshire International
Assuming the 90 days trading horizon Cref Money is expected to generate 1.25 times less return on investment than Wilshire International. But when comparing it to its historical volatility, Cref Money Market is 32.33 times less risky than Wilshire International. It trades about 0.81 of its potential returns per unit of risk. Wilshire International Equity is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 935.00 in Wilshire International Equity on November 5, 2024 and sell it today you would earn a total of 107.00 from holding Wilshire International Equity or generate 11.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 97.17% |
| Values | Daily Returns |
Cref Money Market vs. Wilshire International Equity
Performance |
| Timeline |
| Cref Money Market |
| Wilshire International |
Cref Money and Wilshire International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cref Money and Wilshire International
The main advantage of trading using opposite Cref Money and Wilshire International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cref Money position performs unexpectedly, Wilshire 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 Wilshire International will offset losses from the drop in Wilshire International's long position.| Cref Money vs. Dreyfus Government Cash | Cref Money vs. Federated Government Income | Cref Money vs. Elfun Government Money | Cref Money vs. Great West Government Mortgage |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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