Correlation Between Wilmington Funds and Kensington Dynamic
Can any of the company-specific risk be diversified away by investing in both Wilmington Funds and Kensington Dynamic 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 Funds and Kensington Dynamic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wilmington Funds and Kensington Dynamic Growth, you can compare the effects of market volatilities on Wilmington Funds and Kensington Dynamic 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 Funds with a short position of Kensington Dynamic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilmington Funds and Kensington Dynamic.
Diversification Opportunities for Wilmington Funds and Kensington Dynamic
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wilmington and Kensington is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Wilmington Funds and Kensington Dynamic Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kensington Dynamic Growth and Wilmington Funds 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 Funds are associated (or correlated) with Kensington Dynamic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kensington Dynamic Growth has no effect on the direction of Wilmington Funds i.e., Wilmington Funds and Kensington Dynamic go up and down completely randomly.
Pair Corralation between Wilmington Funds and Kensington Dynamic
If you would invest 1,086 in Kensington Dynamic Growth on September 3, 2024 and sell it today you would earn a total of 31.00 from holding Kensington Dynamic Growth or generate 2.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wilmington Funds vs. Kensington Dynamic Growth
Performance |
| Timeline |
| Wilmington Funds |
| Kensington Dynamic Growth |
Wilmington Funds and Kensington Dynamic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wilmington Funds and Kensington Dynamic
The main advantage of trading using opposite Wilmington Funds and Kensington Dynamic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilmington Funds position performs unexpectedly, Kensington Dynamic 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 Kensington Dynamic will offset losses from the drop in Kensington Dynamic's long position.| Wilmington Funds vs. Vanguard Total Stock | Wilmington Funds vs. Vanguard 500 Index | Wilmington Funds vs. Vanguard Total Stock | Wilmington Funds vs. Vanguard Total Stock |
| Kensington Dynamic vs. Lord Abbett Emerging | Kensington Dynamic vs. Wells Fargo Funds | Kensington Dynamic vs. Elfun Government Money | Kensington Dynamic vs. Wilmington Funds |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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