Correlation Between Wesmark West and WesBanco
Can any of the company-specific risk be diversified away by investing in both Wesmark West and WesBanco 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 WesBanco 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 WesBanco, you can compare the effects of market volatilities on Wesmark West and WesBanco 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 WesBanco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesmark West and WesBanco.
Diversification Opportunities for Wesmark West and WesBanco
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wesmark and WesBanco is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Wesmark West Virginia and WesBanco in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WesBanco 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 WesBanco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WesBanco has no effect on the direction of Wesmark West i.e., Wesmark West and WesBanco go up and down completely randomly.
Pair Corralation between Wesmark West and WesBanco
Assuming the 90 days horizon Wesmark West Virginia is expected to generate 0.19 times more return on investment than WesBanco. However, Wesmark West Virginia is 5.39 times less risky than WesBanco. It trades about 0.04 of its potential returns per unit of risk. WesBanco is currently generating about -0.09 per unit of risk. If you would invest 961.00 in Wesmark West Virginia on October 20, 2024 and sell it today you would earn a total of 2.00 from holding Wesmark West Virginia or generate 0.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Wesmark West Virginia vs. WesBanco
Performance |
| Timeline |
| Wesmark West Virginia |
| WesBanco |
Wesmark West and WesBanco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wesmark West and WesBanco
The main advantage of trading using opposite Wesmark West and WesBanco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wesmark West position performs unexpectedly, WesBanco 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 WesBanco will offset losses from the drop in WesBanco'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 |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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