Correlation Between Westcore Global and Eic Value

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

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

Diversification Opportunities for Westcore Global and Eic Value

0.79

Correlation Coefficient

Westcore Global  Eic Value

Poor diversification

The 3 months correlation between Westcore and Eic is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Westcore Global Large Cap and Eic Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eic Value Fund and Westcore Global 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 Global Large Cap are associated (or correlated) with Eic Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eic Value Fund has no effect on the direction of Westcore Global i.e., Westcore Global and Eic Value go up and down completely randomly.

Pair Corralation between Westcore Global and Eic Value

Assuming the 90 days horizon Westcore Global Large Cap is expected to under-perform the Eic Value. In addition to that, Westcore Global is 1.76 times more volatile than Eic Value Fund. It trades about -0.42 of its total potential returns per unit of risk. Eic Value Fund is currently generating about -0.21 per unit of volatility. If you would invest  1,745  in Eic Value Fund on October 5, 2024 and sell it today you would lose (56.00) from holding Eic Value Fund or give up 3.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.24%
Values	Daily Returns

Westcore Global Large Cap  vs.  Eic Value Fund

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.

Eic Value Fund

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Westcore Global and Eic Value

The main advantage of trading using opposite Westcore Global and Eic Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Westcore Global position performs unexpectedly, Eic Value 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 Eic Value will offset losses from the drop in Eic Value's long position.

The idea behind Westcore Global Large Cap and Eic Value Fund 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.