Correlation Between Enhanced Fixed and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Enhanced Fixed and Old Westbury 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 Enhanced Fixed and Old Westbury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Enhanced Fixed Income and Old Westbury Fixed, you can compare the effects of market volatilities on Enhanced Fixed and Old Westbury 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 Enhanced Fixed with a short position of Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enhanced Fixed and Old Westbury.
Diversification Opportunities for Enhanced Fixed and Old Westbury
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Enhanced and Old is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Enhanced Fixed Income and Old Westbury Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Fixed and Enhanced Fixed 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 Enhanced Fixed Income are associated (or correlated) with Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury Fixed has no effect on the direction of Enhanced Fixed i.e., Enhanced Fixed and Old Westbury go up and down completely randomly.
Pair Corralation between Enhanced Fixed and Old Westbury
Assuming the 90 days horizon Enhanced Fixed Income is expected to generate 1.32 times more return on investment than Old Westbury. However, Enhanced Fixed is 1.32 times more volatile than Old Westbury Fixed. It trades about 0.06 of its potential returns per unit of risk. Old Westbury Fixed is currently generating about 0.04 per unit of risk. If you would invest 883.00 in Enhanced Fixed Income on October 16, 2024 and sell it today you would earn a total of 108.00 from holding Enhanced Fixed Income or generate 12.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Enhanced Fixed Income vs. Old Westbury Fixed
Performance |
| Timeline |
| Enhanced Fixed Income |
| Old Westbury Fixed |
Enhanced Fixed and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Enhanced Fixed and Old Westbury
The main advantage of trading using opposite Enhanced Fixed and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Enhanced Fixed position performs unexpectedly, Old Westbury 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 Old Westbury will offset losses from the drop in Old Westbury's long position.| Enhanced Fixed vs. Ishares Municipal Bond | Enhanced Fixed vs. Old Westbury Municipal | Enhanced Fixed vs. Fidelity California Municipal | Enhanced Fixed vs. Pioneer Amt Free Municipal |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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