Correlation Between Wealthbuilder Moderate and Oshaughnessy Market

Can any of the company-specific risk be diversified away by investing in both Wealthbuilder Moderate and Oshaughnessy Market 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 Wealthbuilder Moderate and Oshaughnessy Market into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Wealthbuilder Moderate Balanced and Oshaughnessy Market Leaders, you can compare the effects of market volatilities on Wealthbuilder Moderate and Oshaughnessy Market 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 Wealthbuilder Moderate with a short position of Oshaughnessy Market. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wealthbuilder Moderate and Oshaughnessy Market.

Diversification Opportunities for Wealthbuilder Moderate and Oshaughnessy Market

0.96

Correlation Coefficient

Wealthbuilder Moderate  Oshaughnessy Market

Almost no diversification

The 3 months correlation between Wealthbuilder and Oshaughnessy is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Wealthbuilder Moderate Balance and Oshaughnessy Market Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oshaughnessy Market and Wealthbuilder Moderate 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 Wealthbuilder Moderate Balanced are associated (or correlated) with Oshaughnessy Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oshaughnessy Market has no effect on the direction of Wealthbuilder Moderate i.e., Wealthbuilder Moderate and Oshaughnessy Market go up and down completely randomly.

Pair Corralation between Wealthbuilder Moderate and Oshaughnessy Market

Assuming the 90 days horizon Wealthbuilder Moderate is expected to generate 2.56 times less return on investment than Oshaughnessy Market. But when comparing it to its historical volatility, Wealthbuilder Moderate Balanced is 2.76 times less risky than Oshaughnessy Market. It trades about 0.27 of its potential returns per unit of risk. Oshaughnessy Market Leaders is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  1,890  in Oshaughnessy Market Leaders on May 1, 2025 and sell it today you would earn a total of  254.00  from holding Oshaughnessy Market Leaders or generate 13.44% return on investment over 90 days.

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

Wealthbuilder Moderate Balance  vs.  Oshaughnessy Market Leaders

Wealthbuilder Moderate

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Wealthbuilder Moderate Balanced are ranked lower than 21 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Wealthbuilder Moderate is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Oshaughnessy Market

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Oshaughnessy Market Leaders are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Oshaughnessy Market showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Wealthbuilder Moderate and Oshaughnessy Market

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

The idea behind Wealthbuilder Moderate Balanced and Oshaughnessy Market Leaders 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.