Correlation Between Wesmark Growth and Plumb Balanced
Can any of the company-specific risk be diversified away by investing in both Wesmark Growth and Plumb Balanced 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 Plumb Balanced 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 Plumb Balanced Fund, you can compare the effects of market volatilities on Wesmark Growth and Plumb Balanced 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 Plumb Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesmark Growth and Plumb Balanced.
Diversification Opportunities for Wesmark Growth and Plumb Balanced
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wesmark and Plumb is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Wesmark Growth Fund and Plumb Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plumb Balanced 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 Plumb Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plumb Balanced has no effect on the direction of Wesmark Growth i.e., Wesmark Growth and Plumb Balanced go up and down completely randomly.
Pair Corralation between Wesmark Growth and Plumb Balanced
Assuming the 90 days horizon Wesmark Growth is expected to generate 3.22 times less return on investment than Plumb Balanced. But when comparing it to its historical volatility, Wesmark Growth Fund is 1.58 times less risky than Plumb Balanced. It trades about 0.12 of its potential returns per unit of risk. Plumb Balanced Fund is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 3,474 in Plumb Balanced Fund on October 20, 2024 and sell it today you would earn a total of 242.00 from holding Plumb Balanced Fund or generate 6.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wesmark Growth Fund vs. Plumb Balanced Fund
Performance |
| Timeline |
| Wesmark Growth |
| Plumb Balanced |
Wesmark Growth and Plumb Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wesmark Growth and Plumb Balanced
The main advantage of trading using opposite Wesmark Growth and Plumb Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wesmark Growth position performs unexpectedly, Plumb Balanced 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 Plumb Balanced will offset losses from the drop in Plumb Balanced's long position.| Wesmark Growth vs. Wesmark Small Pany | Wesmark Growth vs. Wesmark Government Bond | Wesmark Growth vs. Wesmark Balanced Fund | Wesmark Growth vs. Wesmark West Virginia |
| Plumb Balanced vs. Plumb Equity Fund | Plumb Balanced vs. Value Line Asset | Plumb Balanced vs. Sit Balanced Fund | Plumb Balanced vs. Performance Trust Strategic |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |