Correlation Between Wesmark Government and Siit Global

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

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

Diversification Opportunities for Wesmark Government and Siit Global

0.4

Correlation Coefficient

Wesmark Government  Siit Global

Very weak diversification

The 3 months correlation between Wesmark and Siit is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Wesmark Government Bond and Siit Global Managed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Siit Global Managed and Wesmark Government 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 Government Bond are associated (or correlated) with Siit Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Siit Global Managed has no effect on the direction of Wesmark Government i.e., Wesmark Government and Siit Global go up and down completely randomly.

Pair Corralation between Wesmark Government and Siit Global

Assuming the 90 days horizon Wesmark Government Bond is expected to generate 0.13 times more return on investment than Siit Global. However, Wesmark Government Bond is 7.75 times less risky than Siit Global. It trades about -0.27 of its potential returns per unit of risk. Siit Global Managed is currently generating about -0.24 per unit of risk. If you would invest  785.00  in Wesmark Government Bond on September 27, 2024 and sell it today you would lose (12.00) from holding Wesmark Government Bond or give up 1.53% of portfolio value over 90 days.

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

Wesmark Government Bond  vs.  Siit Global Managed

Wesmark Government Bond

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wesmark Government Bond has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Wesmark Government is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Siit Global Managed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Siit Global Managed 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 Wesmark Government and Siit Global

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

The idea behind Wesmark Government Bond and Siit Global Managed 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.