Correlation Between Plumb Balanced and Wesmark West
Can any of the company-specific risk be diversified away by investing in both Plumb Balanced and Wesmark West 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 West 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 West Virginia, you can compare the effects of market volatilities on Plumb Balanced and Wesmark West 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 West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plumb Balanced and Wesmark West.
Diversification Opportunities for Plumb Balanced and Wesmark West
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Plumb and Wesmark is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Plumb Balanced Fund and Wesmark West Virginia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesmark West Virginia 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 West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesmark West Virginia has no effect on the direction of Plumb Balanced i.e., Plumb Balanced and Wesmark West go up and down completely randomly.
Pair Corralation between Plumb Balanced and Wesmark West
Assuming the 90 days horizon Plumb Balanced Fund is expected to generate 2.16 times more return on investment than Wesmark West. However, Plumb Balanced is 2.16 times more volatile than Wesmark West Virginia. It trades about 0.16 of its potential returns per unit of risk. Wesmark West Virginia is currently generating about 0.23 per unit of risk. If you would invest 3,984 in Plumb Balanced Fund on August 30, 2024 and sell it today you would earn a total of 106.00 from holding Plumb Balanced Fund or generate 2.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Plumb Balanced Fund vs. Wesmark West Virginia
Performance |
| Timeline |
| Plumb Balanced |
| Wesmark West Virginia |
Plumb Balanced and Wesmark West Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Plumb Balanced and Wesmark West
The main advantage of trading using opposite Plumb Balanced and Wesmark West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Plumb Balanced position performs unexpectedly, Wesmark West 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 West will offset losses from the drop in Wesmark West's long position.| Plumb Balanced vs. Plumb Equity Fund | Plumb Balanced vs. Value Line Asset | Plumb Balanced vs. Sit Balanced Fund | Plumb Balanced vs. Performance Trust Strategic |
| Wesmark West vs. Wesmark Government Bond | Wesmark West vs. Wesmark Growth Fund | Wesmark West vs. Wesmark Balanced Fund | Wesmark West vs. Wesmark Small Pany |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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