Correlation Between Wilmington Global and Redwood Managed
Can any of the company-specific risk be diversified away by investing in both Wilmington Global and Redwood Managed 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 Global and Redwood Managed into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wilmington Global Alpha and Redwood Managed Municipal, you can compare the effects of market volatilities on Wilmington Global and Redwood Managed 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 Global with a short position of Redwood Managed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilmington Global and Redwood Managed.
Diversification Opportunities for Wilmington Global and Redwood Managed
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wilmington and Redwood is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Wilmington Global Alpha and Redwood Managed Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Redwood Managed Municipal and Wilmington Global 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 Global Alpha are associated (or correlated) with Redwood Managed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Redwood Managed Municipal has no effect on the direction of Wilmington Global i.e., Wilmington Global and Redwood Managed go up and down completely randomly.
Pair Corralation between Wilmington Global and Redwood Managed
Assuming the 90 days horizon Wilmington Global Alpha is expected to generate 1.54 times more return on investment than Redwood Managed. However, Wilmington Global is 1.54 times more volatile than Redwood Managed Municipal. It trades about 0.15 of its potential returns per unit of risk. Redwood Managed Municipal is currently generating about 0.1 per unit of risk. If you would invest 1,262 in Wilmington Global Alpha on September 1, 2024 and sell it today you would earn a total of 72.00 from holding Wilmington Global Alpha or generate 5.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wilmington Global Alpha vs. Redwood Managed Municipal
Performance |
| Timeline |
| Wilmington Global Alpha |
| Redwood Managed Municipal |
Wilmington Global and Redwood Managed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wilmington Global and Redwood Managed
The main advantage of trading using opposite Wilmington Global and Redwood Managed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wilmington Global position performs unexpectedly, Redwood Managed 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 Redwood Managed will offset losses from the drop in Redwood Managed's long position.| Wilmington Global vs. Allianzgi Technology Fund | Wilmington Global vs. Columbia Global Technology | Wilmington Global vs. Biotechnology Fund Class | Wilmington Global vs. Science Technology Fund |
| Redwood Managed vs. Redwood Alphafactor Tactical | Redwood Managed vs. Redwood Systematic Macro | Redwood Managed vs. Neuberger Berman Genesis | Redwood Managed vs. Calamos Strategic Total |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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