Correlation Between Virginia Bond and Wesmark West

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

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

Diversification Opportunities for Virginia Bond and Wesmark West

0.85

Correlation Coefficient

Virginia Bond  Wesmark West

Very poor diversification

The 3 months correlation between Virginia and Wesmark is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Virginia Bond Fund 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 Virginia Bond 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 Virginia Bond Fund 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 Virginia Bond i.e., Virginia Bond and Wesmark West go up and down completely randomly.

Pair Corralation between Virginia Bond and Wesmark West

Assuming the 90 days horizon Virginia Bond is expected to generate 1.36 times less return on investment than Wesmark West. In addition to that, Virginia Bond is 1.2 times more volatile than Wesmark West Virginia. It trades about 0.02 of its total potential returns per unit of risk. Wesmark West Virginia is currently generating about 0.03 per unit of volatility. If you would invest  984.00  in Wesmark West Virginia on September 14, 2024 and sell it today you would earn a total of  4.00  from holding Wesmark West Virginia or generate 0.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Virginia Bond Fund  vs.  Wesmark West Virginia

Virginia Bond

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Virginia Bond Fund are ranked lower than 1 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Virginia Bond is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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 Virginia Bond and Wesmark West

The main advantage of trading using opposite Virginia Bond and Wesmark West positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Virginia Bond 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 Virginia Bond Fund 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.