Correlation Between Westcore Plus and Large Cap
Can any of the company-specific risk be diversified away by investing in both Westcore Plus and Large Cap 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 Westcore Plus and Large Cap into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westcore Plus Bond and Large Cap Fund, you can compare the effects of market volatilities on Westcore Plus and Large Cap 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 Westcore Plus with a short position of Large Cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westcore Plus and Large Cap.
Diversification Opportunities for Westcore Plus and Large Cap
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Westcore and Large is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Westcore Plus Bond and Large Cap Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap Fund and Westcore Plus 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 Westcore Plus Bond are associated (or correlated) with Large Cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Cap Fund has no effect on the direction of Westcore Plus i.e., Westcore Plus and Large Cap go up and down completely randomly.
Pair Corralation between Westcore Plus and Large Cap
Assuming the 90 days horizon Westcore Plus Bond is expected to under-perform the Large Cap. But the mutual fund apears to be less risky and, when comparing its historical volatility, Westcore Plus Bond is 2.3 times less risky than Large Cap. The mutual fund trades about -0.09 of its potential returns per unit of risk. The Large Cap Fund is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,650 in Large Cap Fund on September 12, 2024 and sell it today you would earn a total of 101.00 from holding Large Cap Fund or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westcore Plus Bond vs. Large Cap Fund
Performance |
| Timeline |
| Westcore Plus Bond |
| Large Cap Fund |
Westcore Plus and Large Cap Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westcore Plus and Large Cap
The main advantage of trading using opposite Westcore Plus and Large Cap positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westcore Plus position performs unexpectedly, Large Cap 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 Large Cap will offset losses from the drop in Large Cap's long position.| Westcore Plus vs. Large Cap Fund | Westcore Plus vs. James Balanced Golden | Westcore Plus vs. Aberdeen Global High | Westcore Plus vs. Loomis Sayles Bond |
| Large Cap vs. Wasatch Large Cap | Large Cap vs. Loomis Sayles Bond | Large Cap vs. Harbor International Fund | Large Cap vs. Equity Series Class |
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.
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