Correlation Between Capital World and Westcore Global
Can any of the company-specific risk be diversified away by investing in both Capital World and Westcore Global 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 Capital World and Westcore Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital World Growth and Westcore Global Large Cap, you can compare the effects of market volatilities on Capital World and Westcore Global 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 Capital World with a short position of Westcore Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital World and Westcore Global.
Diversification Opportunities for Capital World and Westcore Global
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Capital and Westcore is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Capital World Growth and Westcore Global Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westcore Global Large and Capital World 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 Capital World Growth are associated (or correlated) with Westcore Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westcore Global Large has no effect on the direction of Capital World i.e., Capital World and Westcore Global go up and down completely randomly.
Pair Corralation between Capital World and Westcore Global
Assuming the 90 days horizon Capital World Growth is expected to generate 0.72 times more return on investment than Westcore Global. However, Capital World Growth is 1.39 times less risky than Westcore Global. It trades about 0.11 of its potential returns per unit of risk. Westcore Global Large Cap is currently generating about -0.01 per unit of risk. If you would invest 6,655 in Capital World Growth on September 12, 2024 and sell it today you would earn a total of 270.00 from holding Capital World Growth or generate 4.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Capital World Growth vs. Westcore Global Large Cap
Performance |
| Timeline |
| Capital World Growth |
| Westcore Global Large |
Capital World and Westcore Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital World and Westcore Global
The main advantage of trading using opposite Capital World and Westcore Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital World position performs unexpectedly, Westcore Global 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 Global will offset losses from the drop in Westcore Global's long position.| Capital World vs. Ishares Municipal Bond | Capital World vs. Versatile Bond Portfolio | Capital World vs. Pace High Yield | Capital World vs. Dreyfusstandish Global Fixed |
| Westcore Global vs. Davenport Small Cap | Westcore Global vs. Massmutual Premier Diversified | Westcore Global vs. Pgim Jennison Diversified | Westcore Global vs. Fidelity Advisor Diversified |
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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