Correlation Between Wesmark West and Wesmark Government
Can any of the company-specific risk be diversified away by investing in both Wesmark West and Wesmark Government 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 West and Wesmark Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wesmark West Virginia and Wesmark Government Bond, you can compare the effects of market volatilities on Wesmark West and Wesmark Government 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 West with a short position of Wesmark Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesmark West and Wesmark Government.
Diversification Opportunities for Wesmark West and Wesmark Government
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wesmark and Wesmark is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Wesmark West Virginia and Wesmark Government Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesmark Government Bond and Wesmark West 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 West Virginia are associated (or correlated) with Wesmark Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesmark Government Bond has no effect on the direction of Wesmark West i.e., Wesmark West and Wesmark Government go up and down completely randomly.
Pair Corralation between Wesmark West and Wesmark Government
Assuming the 90 days horizon Wesmark West Virginia is expected to generate 0.9 times more return on investment than Wesmark Government. However, Wesmark West Virginia is 1.11 times less risky than Wesmark Government. It trades about -0.06 of its potential returns per unit of risk. Wesmark Government Bond is currently generating about -0.1 per unit of risk. If you would invest 986.00 in Wesmark West Virginia on November 1, 2024 and sell it today you would lose (15.00) from holding Wesmark West Virginia or give up 1.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wesmark West Virginia vs. Wesmark Government Bond
Performance |
| Timeline |
| Wesmark West Virginia |
| Wesmark Government Bond |
Wesmark West and Wesmark Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wesmark West and Wesmark Government
The main advantage of trading using opposite Wesmark West and Wesmark Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wesmark West position performs unexpectedly, Wesmark Government 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 Government will offset losses from the drop in Wesmark Government's long position.| Wesmark West vs. Wesmark Government Bond | Wesmark West vs. Wesmark Growth Fund | Wesmark West vs. Wesmark Balanced Fund | Wesmark West vs. Wesmark Small Pany |
| Wesmark Government vs. Wesmark Growth Fund | Wesmark Government vs. Wesmark Small Pany | Wesmark Government vs. Wesmark Balanced Fund | Wesmark Government 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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