Correlation Between Wilmington Diversified and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Wilmington Diversified and Old Westbury 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 Old Westbury 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 Old Westbury Municipal, you can compare the effects of market volatilities on Wilmington Diversified and Old Westbury 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 Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilmington Diversified and Old Westbury.
Diversification Opportunities for Wilmington Diversified and Old Westbury
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wilmington and Old is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Wilmington Diversified Income and Old Westbury Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Municipal 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 Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury Municipal has no effect on the direction of Wilmington Diversified i.e., Wilmington Diversified and Old Westbury go up and down completely randomly.
Pair Corralation between Wilmington Diversified and Old Westbury
Assuming the 90 days horizon Wilmington Diversified Income is expected to generate 4.25 times more return on investment than Old Westbury. However, Wilmington Diversified is 4.25 times more volatile than Old Westbury Municipal. It trades about 0.12 of its potential returns per unit of risk. Old Westbury Municipal is currently generating about 0.07 per unit of risk. If you would invest 1,081 in Wilmington Diversified Income on October 21, 2024 and sell it today you would earn a total of 284.00 from holding Wilmington Diversified Income or generate 26.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wilmington Diversified Income vs. Old Westbury Municipal
Performance |
| Timeline |
| Wilmington Diversified |
| Old Westbury Municipal |
Wilmington Diversified and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wilmington Diversified and Old Westbury
The main advantage of trading using opposite Wilmington Diversified and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilmington Diversified position performs unexpectedly, Old Westbury 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 Old Westbury will offset losses from the drop in Old Westbury's long position.| Wilmington Diversified vs. World Precious Minerals | Wilmington Diversified vs. James Balanced Golden | Wilmington Diversified vs. Europac Gold Fund | Wilmington Diversified vs. Oppenheimer Gold Special |
| Old Westbury vs. Stone Ridge Diversified | Old Westbury vs. Fulcrum Diversified Absolute | Old Westbury vs. Davenport Small Cap | Old Westbury vs. Wilmington Diversified Income |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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