Correlation Between Mutual Of and Westcore Global

Can any of the company-specific risk be diversified away by investing in both Mutual Of 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 Mutual Of and Westcore Global into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mutual Of America and Westcore Global Large Cap, you can compare the effects of market volatilities on Mutual Of 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 Mutual Of with a short position of Westcore Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mutual Of and Westcore Global.

Diversification Opportunities for Mutual Of and Westcore Global

0.66

Correlation Coefficient

Mutual Of  Westcore Global

Poor diversification

The 3 months correlation between Mutual and Westcore is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Mutual Of America 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 Mutual Of 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 Mutual Of America 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 Mutual Of i.e., Mutual Of and Westcore Global go up and down completely randomly.

Pair Corralation between Mutual Of and Westcore Global

Assuming the 90 days horizon Mutual Of is expected to generate 1.88 times less return on investment than Westcore Global. But when comparing it to its historical volatility, Mutual Of America is 1.31 times less risky than Westcore Global. It trades about 0.05 of its potential returns per unit of risk. Westcore Global Large Cap is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  959.00  in Westcore Global Large Cap on October 5, 2024 and sell it today you would earn a total of  167.00  from holding Westcore Global Large Cap or generate 17.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.68%
Values	Daily Returns

Mutual Of America  vs.  Westcore Global Large Cap

Mutual Of America

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mutual Of America has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Mutual Of is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Westcore Global Large

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Westcore Global Large Cap has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Westcore Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Mutual Of and Westcore Global

The main advantage of trading using opposite Mutual Of and Westcore Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mutual Of 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.

The idea behind Mutual Of America and Westcore Global Large Cap pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.