Correlation Between Wilmington Trust and Barrow Hanley
Can any of the company-specific risk be diversified away by investing in both Wilmington Trust and Barrow Hanley 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 Barrow Hanley 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 Barrow Hanley Floating, you can compare the effects of market volatilities on Wilmington Trust and Barrow Hanley 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 Barrow Hanley. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilmington Trust and Barrow Hanley.
Diversification Opportunities for Wilmington Trust and Barrow Hanley
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wilmington and Barrow is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Wilmington Trust Retirement and Barrow Hanley Floating in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barrow Hanley Floating 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 Barrow Hanley. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barrow Hanley Floating has no effect on the direction of Wilmington Trust i.e., Wilmington Trust and Barrow Hanley go up and down completely randomly.
Pair Corralation between Wilmington Trust and Barrow Hanley
Assuming the 90 days trading horizon Wilmington Trust Retirement is expected to generate 3.7 times more return on investment than Barrow Hanley. However, Wilmington Trust is 3.7 times more volatile than Barrow Hanley Floating. It trades about 0.09 of its potential returns per unit of risk. Barrow Hanley Floating is currently generating about 0.11 per unit of risk. If you would invest 28,105 in Wilmington Trust Retirement on September 12, 2024 and sell it today you would earn a total of 6,250 from holding Wilmington Trust Retirement or generate 22.24% 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. Barrow Hanley Floating
Performance |
| Timeline |
| Wilmington Trust Ret |
| Barrow Hanley Floating |
Wilmington Trust and Barrow Hanley Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wilmington Trust and Barrow Hanley
The main advantage of trading using opposite Wilmington Trust and Barrow Hanley positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilmington Trust position performs unexpectedly, Barrow Hanley 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 Barrow Hanley will offset losses from the drop in Barrow Hanley's long position.| Wilmington Trust vs. Vanguard Total Stock | Wilmington Trust vs. Vanguard 500 Index | Wilmington Trust vs. Vanguard Total Stock | Wilmington Trust vs. Vanguard Total Stock |
| Barrow Hanley vs. Putnman Retirement Ready | Barrow Hanley vs. Pro Blend Moderate Term | Barrow Hanley vs. Wilmington Trust Retirement | Barrow Hanley vs. Sa Worldwide Moderate |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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