Correlation Between Wesmark Government and Aqr Large
Can any of the company-specific risk be diversified away by investing in both Wesmark Government and Aqr Large 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 Wesmark Government and Aqr Large into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wesmark Government Bond and Aqr Large Cap, you can compare the effects of market volatilities on Wesmark Government and Aqr Large 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 Wesmark Government with a short position of Aqr Large. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesmark Government and Aqr Large.
Diversification Opportunities for Wesmark Government and Aqr Large
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Wesmark and Aqr is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Wesmark Government Bond and Aqr Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Large Cap and Wesmark Government 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 Wesmark Government Bond are associated (or correlated) with Aqr Large. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Large Cap has no effect on the direction of Wesmark Government i.e., Wesmark Government and Aqr Large go up and down completely randomly.
Pair Corralation between Wesmark Government and Aqr Large
Assuming the 90 days horizon Wesmark Government is expected to generate 3.4 times less return on investment than Aqr Large. But when comparing it to its historical volatility, Wesmark Government Bond is 3.19 times less risky than Aqr Large. It trades about 0.07 of its potential returns per unit of risk. Aqr Large Cap is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,071 in Aqr Large Cap on September 14, 2024 and sell it today you would earn a total of 498.00 from holding Aqr Large Cap or generate 24.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wesmark Government Bond vs. Aqr Large Cap
Performance |
| Timeline |
| Wesmark Government Bond |
| Aqr Large Cap |
Wesmark Government and Aqr Large Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wesmark Government and Aqr Large
The main advantage of trading using opposite Wesmark Government and Aqr Large positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wesmark Government position performs unexpectedly, Aqr Large 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 Aqr Large will offset losses from the drop in Aqr Large's long position.| Wesmark Government vs. Wesmark Growth Fund | Wesmark Government vs. Wesmark Small Pany | Wesmark Government vs. Wesmark Balanced Fund | Wesmark Government vs. Federated International Leaders |
| Aqr Large vs. Wesmark Government Bond | Aqr Large vs. Us Government Securities | Aqr Large vs. Dws Government Money | Aqr Large vs. Payden Government Fund |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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