Correlation Between Wesmark Balanced and Wesmark Government
Can any of the company-specific risk be diversified away by investing in both Wesmark Balanced and Wesmark Government 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 Wesmark Government 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 Wesmark Government Bond, you can compare the effects of market volatilities on Wesmark Balanced and Wesmark Government 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 Wesmark Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesmark Balanced and Wesmark Government.
Diversification Opportunities for Wesmark Balanced and Wesmark Government
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wesmark and Wesmark is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Wesmark Balanced Fund and Wesmark Government Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesmark Government Bond 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 Wesmark Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesmark Government Bond has no effect on the direction of Wesmark Balanced i.e., Wesmark Balanced and Wesmark Government go up and down completely randomly.
Pair Corralation between Wesmark Balanced and Wesmark Government
Assuming the 90 days horizon Wesmark Balanced is expected to generate 3.04 times less return on investment than Wesmark Government. But when comparing it to its historical volatility, Wesmark Balanced Fund is 1.17 times less risky than Wesmark Government. It trades about 0.13 of its potential returns per unit of risk. Wesmark Government Bond is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest 777.00 in Wesmark Government Bond on December 4, 2024 and sell it today you would earn a total of 18.00 from holding Wesmark Government Bond or generate 2.32% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Wesmark Balanced Fund vs. Wesmark Government Bond
Performance |
Timeline |
Wesmark Balanced |
Wesmark Government Bond |
Wesmark Balanced and Wesmark Government Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Wesmark Balanced and Wesmark Government
The main advantage of trading using opposite Wesmark Balanced and Wesmark Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wesmark Balanced position performs unexpectedly, Wesmark Government 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 Wesmark Government will offset losses from the drop in Wesmark Government's long position.Wesmark Balanced vs. Wesmark Growth Fund | Wesmark Balanced vs. Wesmark Government Bond | Wesmark Balanced vs. Wesmark Small Pany | Wesmark Balanced vs. Wesmark West Virginia |
Wesmark Government vs. Wesmark Growth Fund | Wesmark Government vs. Wesmark Small Pany | Wesmark Government vs. Wesmark Balanced Fund | Wesmark Government vs. Wesmark West Virginia |
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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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