Correlation Between Federated International and Wesmark Growth
Can any of the company-specific risk be diversified away by investing in both Federated International and Wesmark Growth 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 Federated International and Wesmark Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Federated International Leaders and Wesmark Growth Fund, you can compare the effects of market volatilities on Federated International and Wesmark Growth 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 Federated International with a short position of Wesmark Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federated International and Wesmark Growth.
Diversification Opportunities for Federated International and Wesmark Growth
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Federated and Wesmark is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Federated International Leader and Wesmark Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesmark Growth and Federated International 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 Federated International Leaders are associated (or correlated) with Wesmark Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesmark Growth has no effect on the direction of Federated International i.e., Federated International and Wesmark Growth go up and down completely randomly.
Pair Corralation between Federated International and Wesmark Growth
Assuming the 90 days horizon Federated International Leaders is expected to generate 1.12 times more return on investment than Wesmark Growth. However, Federated International is 1.12 times more volatile than Wesmark Growth Fund. It trades about 0.32 of its potential returns per unit of risk. Wesmark Growth Fund is currently generating about -0.14 per unit of risk. If you would invest 3,700 in Federated International Leaders on November 28, 2024 and sell it today you would earn a total of 217.00 from holding Federated International Leaders or generate 5.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Federated International Leader vs. Wesmark Growth Fund
Performance |
| Timeline |
| Federated International |
| Wesmark Growth |
Federated International and Wesmark Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federated International and Wesmark Growth
The main advantage of trading using opposite Federated International and Wesmark Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federated International position performs unexpectedly, Wesmark Growth 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 Wesmark Growth will offset losses from the drop in Wesmark Growth's long position.| Federated International vs. Jpmorgan High Yield | Federated International vs. Mainstay High Yield | Federated International vs. T Rowe Price | Federated International vs. Pace High Yield |
| Wesmark Growth vs. Wesmark Small Pany | Wesmark Growth vs. Wesmark Government Bond | Wesmark Growth vs. Wesmark Balanced Fund | Wesmark Growth vs. Wesmark West Virginia |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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