Correlation Between Wilmington Multi-manager and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Wilmington Multi-manager 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 Multi-manager 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 Multi Manager Real and Old Westbury Short Term, you can compare the effects of market volatilities on Wilmington Multi-manager 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 Multi-manager with a short position of Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilmington Multi-manager and Old Westbury.
Diversification Opportunities for Wilmington Multi-manager and Old Westbury
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wilmington and Old is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Wilmington Multi Manager Real and Old Westbury Short Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Short and Wilmington Multi-manager 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 Multi Manager Real 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 Short has no effect on the direction of Wilmington Multi-manager i.e., Wilmington Multi-manager and Old Westbury go up and down completely randomly.
Pair Corralation between Wilmington Multi-manager and Old Westbury
Assuming the 90 days horizon Wilmington Multi Manager Real is expected to generate 4.93 times more return on investment than Old Westbury. However, Wilmington Multi-manager is 4.93 times more volatile than Old Westbury Short Term. It trades about 0.14 of its potential returns per unit of risk. Old Westbury Short Term is currently generating about 0.15 per unit of risk. If you would invest 1,427 in Wilmington Multi Manager Real on September 1, 2024 and sell it today you would earn a total of 25.00 from holding Wilmington Multi Manager Real or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wilmington Multi Manager Real vs. Old Westbury Short Term
Performance |
| Timeline |
| Wilmington Multi-manager |
| Old Westbury Short |
Wilmington Multi-manager and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wilmington Multi-manager and Old Westbury
The main advantage of trading using opposite Wilmington Multi-manager and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilmington Multi-manager 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 Multi-manager vs. Chartwell Small Cap | Wilmington Multi-manager vs. T Rowe Price | Wilmington Multi-manager vs. Artisan Small Cap | Wilmington Multi-manager vs. Ab Small Cap |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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