Correlation Between Plumb Balanced and Wesmark Growth
Can any of the company-specific risk be diversified away by investing in both Plumb Balanced 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 Plumb Balanced and Wesmark Growth into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Plumb Balanced Fund and Wesmark Growth Fund, you can compare the effects of market volatilities on Plumb Balanced 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 Plumb Balanced with a short position of Wesmark Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plumb Balanced and Wesmark Growth.
Diversification Opportunities for Plumb Balanced and Wesmark Growth
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Plumb and Wesmark is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Plumb Balanced Fund and Wesmark Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesmark Growth and Plumb Balanced 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 Plumb Balanced Fund 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 Plumb Balanced i.e., Plumb Balanced and Wesmark Growth go up and down completely randomly.
Pair Corralation between Plumb Balanced and Wesmark Growth
Assuming the 90 days horizon Plumb Balanced is expected to generate 1.23 times less return on investment than Wesmark Growth. But when comparing it to its historical volatility, Plumb Balanced Fund is 1.18 times less risky than Wesmark Growth. It trades about 0.08 of its potential returns per unit of risk. Wesmark Growth Fund is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,308 in Wesmark Growth Fund on August 27, 2024 and sell it today you would earn a total of 303.00 from holding Wesmark Growth Fund or generate 13.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plumb Balanced Fund vs. Wesmark Growth Fund
Performance |
| Timeline |
| Plumb Balanced |
| Wesmark Growth |
Plumb Balanced and Wesmark Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plumb Balanced and Wesmark Growth
The main advantage of trading using opposite Plumb Balanced and Wesmark Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plumb Balanced 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.| Plumb Balanced vs. Value Line Asset | Plumb Balanced vs. Sit Balanced Fund | Plumb Balanced vs. Performance Trust Strategic | Plumb Balanced vs. Columbia Balanced Fund |
| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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