Correlation Between Westcore Small-cap and Westcore Global
Can any of the company-specific risk be diversified away by investing in both Westcore Small-cap and Westcore Global 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 Small-cap and Westcore Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Westcore Small Cap Growth and Westcore Global Large Cap, you can compare the effects of market volatilities on Westcore Small-cap and Westcore Global 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 Small-cap with a short position of Westcore Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westcore Small-cap and Westcore Global.
Diversification Opportunities for Westcore Small-cap and Westcore Global
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Westcore and Westcore is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Westcore Small Cap Growth and Westcore Global Large Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Westcore Global Large and Westcore Small-cap 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 Small Cap Growth are associated (or correlated) with Westcore Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Westcore Global Large has no effect on the direction of Westcore Small-cap i.e., Westcore Small-cap and Westcore Global go up and down completely randomly.
Pair Corralation between Westcore Small-cap and Westcore Global
Assuming the 90 days horizon Westcore Small Cap Growth is expected to generate 1.62 times more return on investment than Westcore Global. However, Westcore Small-cap is 1.62 times more volatile than Westcore Global Large Cap. It trades about 0.13 of its potential returns per unit of risk. Westcore Global Large Cap is currently generating about 0.11 per unit of risk. If you would invest 1,888 in Westcore Small Cap Growth on September 1, 2024 and sell it today you would earn a total of 420.00 from holding Westcore Small Cap Growth or generate 22.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Westcore Small Cap Growth vs. Westcore Global Large Cap
Performance |
| Timeline |
| Westcore Small Cap |
| Westcore Global Large |
Westcore Small-cap and Westcore Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Westcore Small-cap and Westcore Global
The main advantage of trading using opposite Westcore Small-cap and Westcore Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westcore Small-cap position performs unexpectedly, Westcore Global 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 Westcore Global will offset losses from the drop in Westcore Global's long position.| Westcore Small-cap vs. Segall Bryant Hamill | Westcore Small-cap vs. Segall Bryant Hamill | Westcore Small-cap vs. Segall Bryant Hamill | Westcore Small-cap vs. Segall Bryant Hamill |
| Westcore Global vs. Westcore Flexible Income | Westcore Global vs. Westcore Plus Bond | Westcore Global vs. Teton Westwood Equity | Westcore Global vs. Westcore Orado Tax Exempt |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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