Correlation Between Wilmington Diversified and Inflation Protected
Can any of the company-specific risk be diversified away by investing in both Wilmington Diversified and Inflation Protected 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 Diversified and Inflation Protected into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wilmington Diversified Income and Inflation Protected Bond Fund, you can compare the effects of market volatilities on Wilmington Diversified and Inflation Protected 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 Diversified with a short position of Inflation Protected. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilmington Diversified and Inflation Protected.
Diversification Opportunities for Wilmington Diversified and Inflation Protected
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wilmington and Inflation is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Wilmington Diversified Income and Inflation Protected Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inflation Protected and Wilmington Diversified 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 Diversified Income are associated (or correlated) with Inflation Protected. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inflation Protected has no effect on the direction of Wilmington Diversified i.e., Wilmington Diversified and Inflation Protected go up and down completely randomly.
Pair Corralation between Wilmington Diversified and Inflation Protected
Assuming the 90 days horizon Wilmington Diversified Income is expected to under-perform the Inflation Protected. In addition to that, Wilmington Diversified is 1.55 times more volatile than Inflation Protected Bond Fund. It trades about -0.17 of its total potential returns per unit of risk. Inflation Protected Bond Fund is currently generating about 0.17 per unit of volatility. If you would invest 1,040 in Inflation Protected Bond Fund on September 13, 2024 and sell it today you would earn a total of 13.00 from holding Inflation Protected Bond Fund or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wilmington Diversified Income vs. Inflation Protected Bond Fund
Performance |
| Timeline |
| Wilmington Diversified |
| Inflation Protected |
Wilmington Diversified and Inflation Protected Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wilmington Diversified and Inflation Protected
The main advantage of trading using opposite Wilmington Diversified and Inflation Protected positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilmington Diversified position performs unexpectedly, Inflation Protected 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 Inflation Protected will offset losses from the drop in Inflation Protected's long position.| Wilmington Diversified vs. Prudential Health Sciences | Wilmington Diversified vs. Fidelity Advisor Health | Wilmington Diversified vs. Lord Abbett Health | Wilmington Diversified vs. Invesco Global Health |
| Inflation Protected vs. Lord Abbett Inflation | Inflation Protected vs. Aqr Managed Futures | Inflation Protected vs. Arrow Managed Futures | Inflation Protected vs. Federated Hermes Inflation |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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