Correlation Between SCOR PK and Wesmark Government
Can any of the company-specific risk be diversified away by investing in both SCOR PK 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 SCOR PK and Wesmark Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR PK and Wesmark Government Bond, you can compare the effects of market volatilities on SCOR PK 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 SCOR PK with a short position of Wesmark Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and Wesmark Government.
Diversification Opportunities for SCOR PK and Wesmark Government
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SCOR and Wesmark is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK 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 SCOR PK 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 SCOR PK 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 SCOR PK i.e., SCOR PK and Wesmark Government go up and down completely randomly.
Pair Corralation between SCOR PK and Wesmark Government
Assuming the 90 days horizon SCOR PK is expected to generate 10.03 times more return on investment than Wesmark Government. However, SCOR PK is 10.03 times more volatile than Wesmark Government Bond. It trades about 0.31 of its potential returns per unit of risk. Wesmark Government Bond is currently generating about 0.11 per unit of risk. If you would invest 214.00 in SCOR PK on September 13, 2024 and sell it today you would earn a total of 40.00 from holding SCOR PK or generate 18.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
SCOR PK vs. Wesmark Government Bond
Performance |
| Timeline |
| SCOR PK |
| Wesmark Government Bond |
SCOR PK and Wesmark Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOR PK and Wesmark Government
The main advantage of trading using opposite SCOR PK and Wesmark Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR PK 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.The idea behind SCOR PK and Wesmark Government Bond pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Wesmark Government vs. Wesmark Growth Fund | Wesmark Government vs. Wesmark Small Pany | Wesmark Government vs. Wesmark Balanced Fund | Wesmark Government vs. Federated International Leaders |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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