Correlation Between Wilmington Diversified and Wilmington Multi-manager
Can any of the company-specific risk be diversified away by investing in both Wilmington Diversified and Wilmington Multi-manager 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 Wilmington Multi-manager 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 Wilmington Multi Manager Real, you can compare the effects of market volatilities on Wilmington Diversified and Wilmington Multi-manager 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 Wilmington Multi-manager. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilmington Diversified and Wilmington Multi-manager.
Diversification Opportunities for Wilmington Diversified and Wilmington Multi-manager
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wilmington and Wilmington is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Wilmington Diversified Income and Wilmington Multi Manager Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmington Multi-manager 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 Wilmington Multi-manager. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmington Multi-manager has no effect on the direction of Wilmington Diversified i.e., Wilmington Diversified and Wilmington Multi-manager go up and down completely randomly.
Pair Corralation between Wilmington Diversified and Wilmington Multi-manager
Assuming the 90 days horizon Wilmington Diversified Income is expected to generate 1.58 times more return on investment than Wilmington Multi-manager. However, Wilmington Diversified is 1.58 times more volatile than Wilmington Multi Manager Real. It trades about 0.32 of its potential returns per unit of risk. Wilmington Multi Manager Real is currently generating about 0.5 per unit of risk. If you would invest 1,332 in Wilmington Diversified Income on November 9, 2024 and sell it today you would earn a total of 64.00 from holding Wilmington Diversified Income or generate 4.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wilmington Diversified Income vs. Wilmington Multi Manager Real
Performance |
| Timeline |
| Wilmington Diversified |
| Wilmington Multi-manager |
Wilmington Diversified and Wilmington Multi-manager Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wilmington Diversified and Wilmington Multi-manager
The main advantage of trading using opposite Wilmington Diversified and Wilmington Multi-manager positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilmington Diversified position performs unexpectedly, Wilmington Multi-manager 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 Wilmington Multi-manager will offset losses from the drop in Wilmington Multi-manager's long position.| Wilmington Diversified vs. Bbh Intermediate Municipal | Wilmington Diversified vs. Gmo High Yield | Wilmington Diversified vs. Siit High Yield | Wilmington Diversified vs. Old Westbury Fixed |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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