Correlation Between International Bond and Westcore Plus
Can any of the company-specific risk be diversified away by investing in both International Bond and Westcore Plus 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 International Bond and Westcore Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Bond Fund and Westcore Plus Bond, you can compare the effects of market volatilities on International Bond and Westcore Plus 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 International Bond with a short position of Westcore Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Bond and Westcore Plus.
Diversification Opportunities for International Bond and Westcore Plus
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between International and Westcore is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding International Bond Fund and Westcore Plus Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westcore Plus Bond and International Bond 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 International Bond Fund are associated (or correlated) with Westcore Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westcore Plus Bond has no effect on the direction of International Bond i.e., International Bond and Westcore Plus go up and down completely randomly.
Pair Corralation between International Bond and Westcore Plus
Assuming the 90 days horizon International Bond is expected to generate 3.96 times less return on investment than Westcore Plus. In addition to that, International Bond is 1.47 times more volatile than Westcore Plus Bond. It trades about 0.01 of its total potential returns per unit of risk. Westcore Plus Bond is currently generating about 0.05 per unit of volatility. If you would invest 866.00 in Westcore Plus Bond on August 30, 2024 and sell it today you would earn a total of 78.00 from holding Westcore Plus Bond or generate 9.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 31.31% |
| Values | Daily Returns |
International Bond Fund vs. Westcore Plus Bond
Performance |
| Timeline |
| International Bond |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Westcore Plus Bond |
International Bond and Westcore Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Bond and Westcore Plus
The main advantage of trading using opposite International Bond and Westcore Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Bond position performs unexpectedly, Westcore Plus 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 Westcore Plus will offset losses from the drop in Westcore Plus' long position.| International Bond vs. T Rowe Price | International Bond vs. Global Gold Fund | International Bond vs. Inflation Adjusted Bond Fund | International Bond vs. Loomis Sayles Global |
| Westcore Plus vs. Pimco Income Fund | Westcore Plus vs. HUMANA INC | Westcore Plus vs. Aquagold International | Westcore Plus vs. Barloworld Ltd ADR |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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