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 Large, 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
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Global and Old is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Global Gold Fund and Old Westbury Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Large 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 Large 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 generate 1.52 times more return on investment than Old Westbury. However, Global Gold is 1.52 times more volatile than Old Westbury Large. It trades about 0.41 of its potential returns per unit of risk. Old Westbury Large is currently generating about 0.16 per unit of risk. If you would invest 1,211 in Global Gold Fund on November 3, 2024 and sell it today you would earn a total of 138.00 from holding Global Gold Fund or generate 11.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Gold Fund vs. Old Westbury Large
Performance |
| Timeline |
| Global Gold Fund |
| Old Westbury Large |
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. Eagle Mlp Strategy | Global Gold vs. Dodge Cox Emerging | Global Gold vs. Vy Jpmorgan Emerging | Global Gold vs. Nasdaq 100 2x Strategy |
| Old Westbury vs. Chartwell Short Duration | Old Westbury vs. Ms Global Fixed | Old Westbury vs. Ultra Short Fixed Income | Old Westbury vs. Ambrus Core Bond |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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