Correlation Between Wilmington Trust and Chestnut Street
Can any of the company-specific risk be diversified away by investing in both Wilmington Trust and Chestnut Street 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 Chestnut Street 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 Chestnut Street Exchange, you can compare the effects of market volatilities on Wilmington Trust and Chestnut Street 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 Chestnut Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilmington Trust and Chestnut Street.
Diversification Opportunities for Wilmington Trust and Chestnut Street
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Wilmington and Chestnut is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Wilmington Trust Retirement and Chestnut Street Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chestnut Street Exchange 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 Chestnut Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chestnut Street Exchange has no effect on the direction of Wilmington Trust i.e., Wilmington Trust and Chestnut Street go up and down completely randomly.
Pair Corralation between Wilmington Trust and Chestnut Street
Assuming the 90 days trading horizon Wilmington Trust Retirement is expected to generate 1.43 times more return on investment than Chestnut Street. However, Wilmington Trust is 1.43 times more volatile than Chestnut Street Exchange. It trades about 0.06 of its potential returns per unit of risk. Chestnut Street Exchange is currently generating about 0.08 per unit of risk. If you would invest 31,657 in Wilmington Trust Retirement on October 26, 2024 and sell it today you would earn a total of 2,392 from holding Wilmington Trust Retirement or generate 7.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wilmington Trust Retirement vs. Chestnut Street Exchange
Performance |
| Timeline |
| Wilmington Trust Ret |
| Chestnut Street Exchange |
Wilmington Trust and Chestnut Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wilmington Trust and Chestnut Street
The main advantage of trading using opposite Wilmington Trust and Chestnut Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilmington Trust position performs unexpectedly, Chestnut Street 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 Chestnut Street will offset losses from the drop in Chestnut Street'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 |
| Chestnut Street vs. Calvert Moderate Allocation | Chestnut Street vs. Sierra E Retirement | Chestnut Street vs. Voya Retirement Moderate | Chestnut Street 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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