Correlation Between Ab Concentrated and Wilmington Large-cap

Can any of the company-specific risk be diversified away by investing in both Ab Concentrated and Wilmington Large-cap 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 Ab Concentrated and Wilmington Large-cap into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ab Centrated Growth and Wilmington Large Cap Strategy, you can compare the effects of market volatilities on Ab Concentrated and Wilmington Large-cap 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 Ab Concentrated with a short position of Wilmington Large-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Concentrated and Wilmington Large-cap.

Diversification Opportunities for Ab Concentrated and Wilmington Large-cap

0.94

Correlation Coefficient

Ab Concentrated  Wilmington Large-cap

Almost no diversification

The 3 months correlation between WPSGX and Wilmington is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Ab Centrated Growth and Wilmington Large Cap Strategy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmington Large Cap and Ab Concentrated 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 Ab Centrated Growth are associated (or correlated) with Wilmington Large-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmington Large Cap has no effect on the direction of Ab Concentrated i.e., Ab Concentrated and Wilmington Large-cap go up and down completely randomly.

Pair Corralation between Ab Concentrated and Wilmington Large-cap

Assuming the 90 days horizon Ab Centrated Growth is expected to under-perform the Wilmington Large-cap. In addition to that, Ab Concentrated is 1.32 times more volatile than Wilmington Large Cap Strategy. It trades about -0.17 of its total potential returns per unit of risk. Wilmington Large Cap Strategy is currently generating about -0.11 per unit of volatility. If you would invest  3,486  in Wilmington Large Cap Strategy on December 1, 2024 and sell it today you would lose (263.00) from holding Wilmington Large Cap Strategy or give up 7.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Ab Centrated Growth  vs.  Wilmington Large Cap Strategy

Ab Centrated Growth

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ab Centrated Growth has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's technical and fundamental indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Wilmington Large Cap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Wilmington Large Cap Strategy has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Ab Concentrated and Wilmington Large-cap

The main advantage of trading using opposite Ab Concentrated and Wilmington Large-cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Concentrated position performs unexpectedly, Wilmington Large-cap 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 Large-cap will offset losses from the drop in Wilmington Large-cap's long position.

The idea behind Ab Centrated Growth and Wilmington Large Cap Strategy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.