Correlation Between Wesmark Government and Ab Pennsylvania
Can any of the company-specific risk be diversified away by investing in both Wesmark Government and Ab Pennsylvania 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 Ab Pennsylvania 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 Ab Pennsylvania Portfolio, you can compare the effects of market volatilities on Wesmark Government and Ab Pennsylvania 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 Ab Pennsylvania. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesmark Government and Ab Pennsylvania.
Diversification Opportunities for Wesmark Government and Ab Pennsylvania
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wesmark and APACX is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Wesmark Government Bond and Ab Pennsylvania Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Pennsylvania Portfolio 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 Ab Pennsylvania. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Pennsylvania Portfolio has no effect on the direction of Wesmark Government i.e., Wesmark Government and Ab Pennsylvania go up and down completely randomly.
Pair Corralation between Wesmark Government and Ab Pennsylvania
Assuming the 90 days horizon Wesmark Government Bond is expected to under-perform the Ab Pennsylvania. In addition to that, Wesmark Government is 1.51 times more volatile than Ab Pennsylvania Portfolio. It trades about -0.16 of its total potential returns per unit of risk. Ab Pennsylvania Portfolio is currently generating about 0.01 per unit of volatility. If you would invest 979.00 in Ab Pennsylvania Portfolio on September 14, 2024 and sell it today you would earn a total of 1.00 from holding Ab Pennsylvania Portfolio or generate 0.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wesmark Government Bond vs. Ab Pennsylvania Portfolio
Performance |
| Timeline |
| Wesmark Government Bond |
| Ab Pennsylvania Portfolio |
Wesmark Government and Ab Pennsylvania Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wesmark Government and Ab Pennsylvania
The main advantage of trading using opposite Wesmark Government and Ab Pennsylvania positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wesmark Government position performs unexpectedly, Ab Pennsylvania 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 Ab Pennsylvania will offset losses from the drop in Ab Pennsylvania'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 |
| Ab Pennsylvania vs. Davis Government Bond | Ab Pennsylvania vs. Wesmark Government Bond | Ab Pennsylvania vs. Short Term Government Fund | Ab Pennsylvania vs. Dunham Porategovernment Bond |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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