Correlation Between Wesmark Growth and Hawaiian Tax
Can any of the company-specific risk be diversified away by investing in both Wesmark Growth and Hawaiian Tax 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 Growth and Hawaiian Tax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wesmark Growth Fund and Hawaiian Tax Free Trust, you can compare the effects of market volatilities on Wesmark Growth and Hawaiian Tax 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 Growth with a short position of Hawaiian Tax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesmark Growth and Hawaiian Tax.
Diversification Opportunities for Wesmark Growth and Hawaiian Tax
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Wesmark and Hawaiian is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Wesmark Growth Fund and Hawaiian Tax Free Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawaiian Tax Free and Wesmark Growth 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 Growth Fund are associated (or correlated) with Hawaiian Tax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawaiian Tax Free has no effect on the direction of Wesmark Growth i.e., Wesmark Growth and Hawaiian Tax go up and down completely randomly.
Pair Corralation between Wesmark Growth and Hawaiian Tax
Assuming the 90 days horizon Wesmark Growth Fund is expected to generate 6.0 times more return on investment than Hawaiian Tax. However, Wesmark Growth is 6.0 times more volatile than Hawaiian Tax Free Trust. It trades about 0.14 of its potential returns per unit of risk. Hawaiian Tax Free Trust is currently generating about 0.46 per unit of risk. If you would invest 2,628 in Wesmark Growth Fund on September 12, 2024 and sell it today you would earn a total of 45.00 from holding Wesmark Growth Fund or generate 1.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wesmark Growth Fund vs. Hawaiian Tax Free Trust
Performance |
| Timeline |
| Wesmark Growth |
| Hawaiian Tax Free |
Wesmark Growth and Hawaiian Tax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wesmark Growth and Hawaiian Tax
The main advantage of trading using opposite Wesmark Growth and Hawaiian Tax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wesmark Growth position performs unexpectedly, Hawaiian Tax 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 Hawaiian Tax will offset losses from the drop in Hawaiian Tax's long position.| Wesmark Growth vs. Vanguard Total Stock | Wesmark Growth vs. Vanguard 500 Index | Wesmark Growth vs. Vanguard Total Stock | Wesmark Growth vs. Vanguard Total Stock |
| Hawaiian Tax vs. Wesmark Government Bond | Hawaiian Tax vs. Wesmark Growth Fund | Hawaiian Tax vs. Wesmark Balanced Fund | Hawaiian Tax vs. Wesmark Small Pany |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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