Correlation Between Equity Series and Westcore Plus
Can any of the company-specific risk be diversified away by investing in both Equity Series 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 Equity Series and Westcore Plus into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equity Series Class and Westcore Plus Bond, you can compare the effects of market volatilities on Equity Series 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 Equity Series with a short position of Westcore Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equity Series and Westcore Plus.
Diversification Opportunities for Equity Series and Westcore Plus
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Equity and Westcore is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Equity Series Class 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 Equity Series 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 Equity Series Class 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 Equity Series i.e., Equity Series and Westcore Plus go up and down completely randomly.
Pair Corralation between Equity Series and Westcore Plus
Assuming the 90 days horizon Equity Series Class is expected to generate 2.38 times more return on investment than Westcore Plus. However, Equity Series is 2.38 times more volatile than Westcore Plus Bond. It trades about 0.25 of its potential returns per unit of risk. Westcore Plus Bond is currently generating about 0.06 per unit of risk. If you would invest 1,614 in Equity Series Class on August 29, 2024 and sell it today you would earn a total of 81.00 from holding Equity Series Class or generate 5.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equity Series Class vs. Westcore Plus Bond
Performance |
| Timeline |
| Equity Series Class |
| Westcore Plus Bond |
Equity Series and Westcore Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equity Series and Westcore Plus
The main advantage of trading using opposite Equity Series and Westcore Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equity Series 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.| Equity Series vs. Large Cap Fund | Equity Series vs. Wasatch Large Cap | Equity Series vs. Westcore Plus Bond | Equity Series vs. Aberdeen Global High |
| 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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