Correlation Between Wesmark Growth and Wesmark Small
Can any of the company-specific risk be diversified away by investing in both Wesmark Growth and Wesmark Small 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 Wesmark Small 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 Wesmark Small Pany, you can compare the effects of market volatilities on Wesmark Growth and Wesmark Small 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 Wesmark Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesmark Growth and Wesmark Small.
Diversification Opportunities for Wesmark Growth and Wesmark Small
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Wesmark and Wesmark is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Wesmark Growth Fund and Wesmark Small Pany in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesmark Small Pany 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 Wesmark Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesmark Small Pany has no effect on the direction of Wesmark Growth i.e., Wesmark Growth and Wesmark Small go up and down completely randomly.
Pair Corralation between Wesmark Growth and Wesmark Small
Assuming the 90 days horizon Wesmark Growth is expected to generate 4.93 times less return on investment than Wesmark Small. But when comparing it to its historical volatility, Wesmark Growth Fund is 1.93 times less risky than Wesmark Small. It trades about 0.13 of its potential returns per unit of risk. Wesmark Small Pany is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 1,529 in Wesmark Small Pany on August 30, 2024 and sell it today you would earn a total of 196.00 from holding Wesmark Small Pany or generate 12.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wesmark Growth Fund vs. Wesmark Small Pany
Performance |
| Timeline |
| Wesmark Growth |
| Wesmark Small Pany |
Wesmark Growth and Wesmark Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wesmark Growth and Wesmark Small
The main advantage of trading using opposite Wesmark Growth and Wesmark Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wesmark Growth position performs unexpectedly, Wesmark Small 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 Wesmark Small will offset losses from the drop in Wesmark Small'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 |
| Wesmark Small vs. Wesmark Growth Fund | Wesmark Small vs. Wesmark Government Bond | Wesmark Small vs. Wesmark Balanced Fund | Wesmark Small vs. Wesmark West Virginia |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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