Correlation Between Wesmark Government and Gmo High
Can any of the company-specific risk be diversified away by investing in both Wesmark Government and Gmo High 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 Gmo High 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 Gmo High Yield, you can compare the effects of market volatilities on Wesmark Government and Gmo High 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 Gmo High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wesmark Government and Gmo High.
Diversification Opportunities for Wesmark Government and Gmo High
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Wesmark and Gmo is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Wesmark Government Bond and Gmo High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo High Yield 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 Gmo High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo High Yield has no effect on the direction of Wesmark Government i.e., Wesmark Government and Gmo High go up and down completely randomly.
Pair Corralation between Wesmark Government and Gmo High
Assuming the 90 days horizon Wesmark Government Bond is expected to generate 1.41 times more return on investment than Gmo High. However, Wesmark Government is 1.41 times more volatile than Gmo High Yield. It trades about 0.17 of its potential returns per unit of risk. Gmo High Yield is currently generating about 0.19 per unit of risk. If you would invest 784.00 in Wesmark Government Bond on September 1, 2025 and sell it today you would earn a total of 20.00 from holding Wesmark Government Bond or generate 2.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wesmark Government Bond vs. Gmo High Yield
Performance |
| Timeline |
| Wesmark Government Bond |
| Gmo High Yield |
Wesmark Government and Gmo High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wesmark Government and Gmo High
The main advantage of trading using opposite Wesmark Government and Gmo High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wesmark Government position performs unexpectedly, Gmo High 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 Gmo High will offset losses from the drop in Gmo High's long position.| Wesmark Government vs. Calvert Moderate Allocation | Wesmark Government vs. Nuveen Large Cap | Wesmark Government vs. Balanced Allocation Fund | Wesmark Government vs. Mutual Of America |
| Gmo High vs. Profunds Large Cap Growth | Gmo High vs. Qs Large Cap | Gmo High vs. T Rowe Price | Gmo High vs. Prudential Qma Large Cap |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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