Correlation Between Nasdaq and Wesmark West

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

By analyzing existing cross correlation between Nasdaq Inc and Wesmark West Virginia, you can compare the effects of market volatilities on Nasdaq and Wesmark West 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 Nasdaq with a short position of Wesmark West. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Wesmark West.

Diversification Opportunities for Nasdaq and Wesmark West

-0.03

Correlation Coefficient

Nasdaq  Wesmark West

Good diversification

The 3 months correlation between Nasdaq and Wesmark is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Wesmark West Virginia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesmark West Virginia and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Wesmark West. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesmark West Virginia has no effect on the direction of Nasdaq i.e., Nasdaq and Wesmark West go up and down completely randomly.

Pair Corralation between Nasdaq and Wesmark West

Given the investment horizon of 90 days Nasdaq Inc is expected to generate 5.01 times more return on investment than Wesmark West. However, Nasdaq is 5.01 times more volatile than Wesmark West Virginia. It trades about 0.14 of its potential returns per unit of risk. Wesmark West Virginia is currently generating about 0.11 per unit of risk. If you would invest  5,318  in Nasdaq Inc on September 14, 2024 and sell it today you would earn a total of  2,694  from holding Nasdaq Inc or generate 50.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.63%
Values	Daily Returns

Nasdaq Inc  vs.  Wesmark West Virginia

Nasdaq Inc

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Nasdaq Inc are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Nasdaq may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Wesmark West Virginia

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wesmark West Virginia are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong primary indicators, Wesmark West is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Nasdaq and Wesmark West

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

The idea behind Nasdaq Inc and Wesmark West Virginia 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..