Correlation Between Global Gold and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Global Gold 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 Global Gold and Old Westbury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Gold Fund and Old Westbury All, you can compare the effects of market volatilities on Global Gold 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 Global Gold with a short position of Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Gold and Old Westbury.
Diversification Opportunities for Global Gold and Old Westbury
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Global and Old is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Global Gold Fund and Old Westbury All in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury All and Global Gold 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 Global Gold Fund 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 All has no effect on the direction of Global Gold i.e., Global Gold and Old Westbury go up and down completely randomly.
Pair Corralation between Global Gold and Old Westbury
Assuming the 90 days horizon Global Gold Fund is expected to under-perform the Old Westbury. In addition to that, Global Gold is 2.43 times more volatile than Old Westbury All. It trades about -0.14 of its total potential returns per unit of risk. Old Westbury All is currently generating about 0.33 per unit of volatility. If you would invest 2,743 in Old Westbury All on September 2, 2024 and sell it today you would earn a total of 160.00 from holding Old Westbury All or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Gold Fund vs. Old Westbury All
Performance |
| Timeline |
| Global Gold Fund |
| Old Westbury All |
Global Gold and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Gold and Old Westbury
The main advantage of trading using opposite Global Gold and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Gold 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.| Global Gold vs. T Rowe Price | Global Gold vs. Nuveen Arizona Municipal | Global Gold vs. Thrivent Income Fund | Global Gold vs. T Rowe Price |
| Old Westbury vs. Precious Metals And | Old Westbury vs. International Investors Gold | Old Westbury vs. Short Precious Metals | Old Westbury vs. Global Gold Fund |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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