Correlation Between Chatham Rock and Wilmington Capital

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

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

Diversification Opportunities for Chatham Rock and Wilmington Capital

-0.44

Correlation Coefficient

Chatham Rock  Wilmington Capital

Very good diversification

The 3 months correlation between Chatham and Wilmington is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Chatham Rock Phosphate and Wilmington Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wilmington Capital and Chatham Rock 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 Chatham Rock Phosphate are associated (or correlated) with Wilmington Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wilmington Capital has no effect on the direction of Chatham Rock i.e., Chatham Rock and Wilmington Capital go up and down completely randomly.

Pair Corralation between Chatham Rock and Wilmington Capital

Assuming the 90 days horizon Chatham Rock Phosphate is expected to under-perform the Wilmington Capital. In addition to that, Chatham Rock is 4.88 times more volatile than Wilmington Capital Management. It trades about -0.03 of its total potential returns per unit of risk. Wilmington Capital Management is currently generating about -0.01 per unit of volatility. If you would invest  215.00  in Wilmington Capital Management on April 25, 2025 and sell it today you would lose (4.00) from holding Wilmington Capital Management or give up 1.86% of portfolio value over 90 days.

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

Chatham Rock Phosphate  vs.  Wilmington Capital Management

Chatham Rock Phosphate

Risk-Adjusted Performance

Very Weak

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

Wilmington Capital

Risk-Adjusted Performance

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 comparatively stable basic indicators, Wilmington Capital is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Chatham Rock and Wilmington Capital

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

The idea behind Chatham Rock Phosphate and Wilmington Capital Management 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.