Correlation Between Wilmington Trust and Ab Municipal
Can any of the company-specific risk be diversified away by investing in both Wilmington Trust and Ab Municipal 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 Wilmington Trust and Ab Municipal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wilmington Trust Retirement and Ab Municipal Bond, you can compare the effects of market volatilities on Wilmington Trust and Ab Municipal 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 Wilmington Trust with a short position of Ab Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilmington Trust and Ab Municipal.
Diversification Opportunities for Wilmington Trust and Ab Municipal
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wilmington and AUNTX is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Wilmington Trust Retirement and Ab Municipal Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Municipal Bond and Wilmington Trust 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 Wilmington Trust Retirement are associated (or correlated) with Ab Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Municipal Bond has no effect on the direction of Wilmington Trust i.e., Wilmington Trust and Ab Municipal go up and down completely randomly.
Pair Corralation between Wilmington Trust and Ab Municipal
Assuming the 90 days trading horizon Wilmington Trust Retirement is expected to generate 5.64 times more return on investment than Ab Municipal. However, Wilmington Trust is 5.64 times more volatile than Ab Municipal Bond. It trades about 0.23 of its potential returns per unit of risk. Ab Municipal Bond is currently generating about 0.38 per unit of risk. If you would invest 32,401 in Wilmington Trust Retirement on November 1, 2024 and sell it today you would earn a total of 1,158 from holding Wilmington Trust Retirement or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wilmington Trust Retirement vs. Ab Municipal Bond
Performance |
| Timeline |
| Wilmington Trust Ret |
| Ab Municipal Bond |
Wilmington Trust and Ab Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wilmington Trust and Ab Municipal
The main advantage of trading using opposite Wilmington Trust and Ab Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilmington Trust position performs unexpectedly, Ab Municipal 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 Ab Municipal will offset losses from the drop in Ab Municipal's long position.| Wilmington Trust vs. Blackrock Science Technology | Wilmington Trust vs. Pgim Jennison Technology | Wilmington Trust vs. Columbia Global Technology | Wilmington Trust vs. Specialized Technology Fund |
| Ab Municipal vs. Retirement Living Through | Ab Municipal vs. American Funds Retirement | Ab Municipal vs. Transamerica Cleartrack Retirement | Ab Municipal vs. Wilmington Trust Retirement |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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