Correlation Between Wealthbuilder Moderate and Gateway Fund
Can any of the company-specific risk be diversified away by investing in both Wealthbuilder Moderate and Gateway Fund 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 Gateway Fund 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 Gateway Fund Class, you can compare the effects of market volatilities on Wealthbuilder Moderate and Gateway Fund 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 Gateway Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wealthbuilder Moderate and Gateway Fund.
Diversification Opportunities for Wealthbuilder Moderate and Gateway Fund
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Wealthbuilder and Gateway is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Wealthbuilder Moderate Balance and Gateway Fund Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gateway Fund Class 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 Gateway Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gateway Fund Class has no effect on the direction of Wealthbuilder Moderate i.e., Wealthbuilder Moderate and Gateway Fund go up and down completely randomly.
Pair Corralation between Wealthbuilder Moderate and Gateway Fund
Assuming the 90 days horizon Wealthbuilder Moderate Balanced is expected to generate 1.23 times more return on investment than Gateway Fund. However, Wealthbuilder Moderate is 1.23 times more volatile than Gateway Fund Class. It trades about 0.05 of its potential returns per unit of risk. Gateway Fund Class is currently generating about 0.05 per unit of risk. If you would invest 1,077 in Wealthbuilder Moderate Balanced on August 26, 2025 and sell it today you would earn a total of 18.00 from holding Wealthbuilder Moderate Balanced or generate 1.67% 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. Gateway Fund Class
Performance |
| Timeline |
| Wealthbuilder Moderate |
| Gateway Fund Class |
Wealthbuilder Moderate and Gateway Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wealthbuilder Moderate and Gateway Fund
The main advantage of trading using opposite Wealthbuilder Moderate and Gateway Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wealthbuilder Moderate position performs unexpectedly, Gateway Fund 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 Gateway Fund will offset losses from the drop in Gateway Fund's long position.The idea behind Wealthbuilder Moderate Balanced and Gateway Fund Class 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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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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