Correlation Between Westcore Plus and Equity Series

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

By analyzing existing cross correlation between Westcore Plus Bond and Equity Series Class, you can compare the effects of market volatilities on Westcore Plus and Equity Series 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 Plus with a short position of Equity Series. Check out your portfolio center. Please also check ongoing floating volatility patterns of Westcore Plus and Equity Series.

Diversification Opportunities for Westcore Plus and Equity Series

-0.57

Correlation Coefficient

Westcore Plus  Equity Series

Excellent diversification

The 3 months correlation between Westcore and Equity is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Westcore Plus Bond and Equity Series Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Series Class and Westcore Plus 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 Plus Bond are associated (or correlated) with Equity Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Series Class has no effect on the direction of Westcore Plus i.e., Westcore Plus and Equity Series go up and down completely randomly.

Pair Corralation between Westcore Plus and Equity Series

Assuming the 90 days horizon Westcore Plus Bond is expected to generate 0.31 times more return on investment than Equity Series. However, Westcore Plus Bond is 3.19 times less risky than Equity Series. It trades about 0.1 of its potential returns per unit of risk. Equity Series Class is currently generating about -0.11 per unit of risk. If you would invest  922.00  in Westcore Plus Bond on December 30, 2024 and sell it today you would earn a total of  18.00  from holding Westcore Plus Bond or generate 1.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Westcore Plus Bond  vs.  Equity Series Class

Westcore Plus Bond

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Westcore Plus Bond are ranked lower than 8 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Westcore Plus is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Equity Series Class

Risk-Adjusted Performance

Very Weak

Over the last 90 days Equity Series Class has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Westcore Plus and Equity Series

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

The idea behind Westcore Plus Bond and Equity Series Class 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.

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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..