Correlation Between Wesmark Balanced and Plumb Balanced
Can any of the company-specific risk be diversified away by investing in both Wesmark Balanced and Plumb Balanced 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 Balanced and Plumb Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wesmark Balanced Fund and Plumb Balanced Fund, you can compare the effects of market volatilities on Wesmark Balanced and Plumb Balanced 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 Balanced with a short position of Plumb Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesmark Balanced and Plumb Balanced.
Diversification Opportunities for Wesmark Balanced and Plumb Balanced
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wesmark and Plumb is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Wesmark Balanced Fund and Plumb Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plumb Balanced and Wesmark Balanced 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 Balanced Fund are associated (or correlated) with Plumb Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plumb Balanced has no effect on the direction of Wesmark Balanced i.e., Wesmark Balanced and Plumb Balanced go up and down completely randomly.
Pair Corralation between Wesmark Balanced and Plumb Balanced
Assuming the 90 days horizon Wesmark Balanced Fund is expected to under-perform the Plumb Balanced. But the mutual fund apears to be less risky and, when comparing its historical volatility, Wesmark Balanced Fund is 1.31 times less risky than Plumb Balanced. The mutual fund trades about -0.12 of its potential returns per unit of risk. The Plumb Balanced Fund is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 3,881 in Plumb Balanced Fund on December 4, 2024 and sell it today you would lose (244.00) from holding Plumb Balanced Fund or give up 6.29% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Wesmark Balanced Fund vs. Plumb Balanced Fund
Performance |
Timeline |
Wesmark Balanced |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Plumb Balanced |
Wesmark Balanced and Plumb Balanced Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wesmark Balanced and Plumb Balanced
The main advantage of trading using opposite Wesmark Balanced and Plumb Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wesmark Balanced position performs unexpectedly, Plumb Balanced 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 Plumb Balanced will offset losses from the drop in Plumb Balanced's long position.Wesmark Balanced vs. Wesmark Growth Fund | Wesmark Balanced vs. Wesmark Government Bond | Wesmark Balanced vs. Wesmark Small Pany | Wesmark Balanced vs. Plumb Balanced Fund |
Plumb Balanced vs. Plumb Equity Fund | Plumb Balanced vs. Value Line Asset | Plumb Balanced vs. Sit Balanced Fund | Plumb Balanced vs. Performance Trust Strategic |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
Other Complementary Tools
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Transaction History View history of all your transactions and understand their impact on performance | |
Economic Indicators Top statistical indicators that provide insights into how an economy is performing |