Correlation Between Wesmark Government and Arbitrage Fund
Can any of the company-specific risk be diversified away by investing in both Wesmark Government and Arbitrage Fund 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 Arbitrage Fund 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 The Arbitrage Fund, you can compare the effects of market volatilities on Wesmark Government and Arbitrage Fund 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 Arbitrage Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesmark Government and Arbitrage Fund.
Diversification Opportunities for Wesmark Government and Arbitrage Fund
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Wesmark and Arbitrage is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Wesmark Government Bond and The Arbitrage Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arbitrage Fund 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 Arbitrage Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arbitrage Fund has no effect on the direction of Wesmark Government i.e., Wesmark Government and Arbitrage Fund go up and down completely randomly.
Pair Corralation between Wesmark Government and Arbitrage Fund
Assuming the 90 days horizon Wesmark Government Bond is expected to generate 1.39 times more return on investment than Arbitrage Fund. However, Wesmark Government is 1.39 times more volatile than The Arbitrage Fund. It trades about -0.04 of its potential returns per unit of risk. The Arbitrage Fund is currently generating about -0.06 per unit of risk. If you would invest 785.00 in Wesmark Government Bond on September 19, 2024 and sell it today you would lose (4.00) from holding Wesmark Government Bond or give up 0.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wesmark Government Bond vs. The Arbitrage Fund
Performance |
| Timeline |
| Wesmark Government Bond |
| Arbitrage Fund |
Wesmark Government and Arbitrage Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wesmark Government and Arbitrage Fund
The main advantage of trading using opposite Wesmark Government and Arbitrage Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wesmark Government position performs unexpectedly, Arbitrage Fund 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 Arbitrage Fund will offset losses from the drop in Arbitrage Fund's long position.| Wesmark Government vs. Wesmark Growth Fund | Wesmark Government vs. Wesmark Small Pany | Wesmark Government vs. Wesmark Balanced Fund | Wesmark Government vs. Wesmark West Virginia |
| Arbitrage Fund vs. Us Government Securities | Arbitrage Fund vs. Dreyfus Government Cash | Arbitrage Fund vs. Wesmark Government Bond | Arbitrage Fund vs. Franklin Adjustable Government |
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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