Correlation Between Wilmington Capital and Baselode Energy

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

By analyzing existing cross correlation between Wilmington Capital Management and Baselode Energy Corp, you can compare the effects of market volatilities on Wilmington Capital and Baselode Energy 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 Capital with a short position of Baselode Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wilmington Capital and Baselode Energy.

Diversification Opportunities for Wilmington Capital and Baselode Energy

0.1

Correlation Coefficient

Wilmington Capital  Baselode Energy

Average diversification

The 3 months correlation between Wilmington and Baselode is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Wilmington Capital Management and Baselode Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baselode Energy Corp and Wilmington Capital 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 Capital Management are associated (or correlated) with Baselode Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baselode Energy Corp has no effect on the direction of Wilmington Capital i.e., Wilmington Capital and Baselode Energy go up and down completely randomly.

Pair Corralation between Wilmington Capital and Baselode Energy

Assuming the 90 days trading horizon Wilmington Capital Management is expected to under-perform the Baselode Energy. But the stock apears to be less risky and, when comparing its historical volatility, Wilmington Capital Management is 1.85 times less risky than Baselode Energy. The stock trades about -0.3 of its potential returns per unit of risk. The Baselode Energy Corp is currently generating about -0.16 of returns per unit of risk over similar time horizon. If you would invest  10.00  in Baselode Energy Corp on September 25, 2024 and sell it today you would lose (2.00) from holding Baselode Energy Corp or give up 20.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

Wilmington Capital Management  vs.  Baselode Energy Corp

Wilmington Capital

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wilmington Capital Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Baselode Energy Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Baselode Energy Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Wilmington Capital and Baselode Energy

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

The idea behind Wilmington Capital Management and Baselode Energy Corp 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.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.