Correlation Between Banking Fund and Wesmark Government
Can any of the company-specific risk be diversified away by investing in both Banking Fund and Wesmark Government 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 Banking Fund and Wesmark Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Banking Fund Class and Wesmark Government Bond, you can compare the effects of market volatilities on Banking Fund and Wesmark Government 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 Banking Fund with a short position of Wesmark Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Banking Fund and Wesmark Government.
Diversification Opportunities for Banking Fund and Wesmark Government
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Banking and Wesmark is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Banking Fund Class and Wesmark Government Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesmark Government Bond and Banking Fund 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 Banking Fund Class are associated (or correlated) with Wesmark Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesmark Government Bond has no effect on the direction of Banking Fund i.e., Banking Fund and Wesmark Government go up and down completely randomly.
Pair Corralation between Banking Fund and Wesmark Government
Assuming the 90 days horizon Banking Fund Class is expected to generate 3.63 times more return on investment than Wesmark Government. However, Banking Fund is 3.63 times more volatile than Wesmark Government Bond. It trades about 0.32 of its potential returns per unit of risk. Wesmark Government Bond is currently generating about 0.06 per unit of risk. If you would invest 7,416 in Banking Fund Class on November 3, 2024 and sell it today you would earn a total of 576.00 from holding Banking Fund Class or generate 7.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Banking Fund Class vs. Wesmark Government Bond
Performance |
| Timeline |
| Banking Fund Class |
| Wesmark Government Bond |
Banking Fund and Wesmark Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Banking Fund and Wesmark Government
The main advantage of trading using opposite Banking Fund and Wesmark Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Banking Fund position performs unexpectedly, Wesmark Government 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 Government will offset losses from the drop in Wesmark Government's long position.| Banking Fund vs. The Growth Equity | Banking Fund vs. Aqr Long Short Equity | Banking Fund vs. Us Vector Equity | Banking Fund vs. Aqr Equity Market |
| Wesmark Government vs. Wesmark Growth Fund | Wesmark Government vs. Wesmark Small Pany | Wesmark Government vs. Wesmark Balanced Fund | Wesmark Government 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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