Correlation Between Alphacentric Global and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Alphacentric Global 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 Alphacentric Global and Old Westbury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alphacentric Global Innovations and Old Westbury Short Term, you can compare the effects of market volatilities on Alphacentric Global 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 Alphacentric Global with a short position of Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphacentric Global and Old Westbury.
Diversification Opportunities for Alphacentric Global and Old Westbury
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alphacentric and Old is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Alphacentric Global Innovation and Old Westbury Short Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Short and Alphacentric Global 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 Alphacentric Global Innovations 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 Short has no effect on the direction of Alphacentric Global i.e., Alphacentric Global and Old Westbury go up and down completely randomly.
Pair Corralation between Alphacentric Global and Old Westbury
Assuming the 90 days horizon Alphacentric Global Innovations is expected to generate 16.67 times more return on investment than Old Westbury. However, Alphacentric Global is 16.67 times more volatile than Old Westbury Short Term. It trades about 0.2 of its potential returns per unit of risk. Old Westbury Short Term is currently generating about 0.28 per unit of risk. If you would invest 1,188 in Alphacentric Global Innovations on September 14, 2024 and sell it today you would earn a total of 84.00 from holding Alphacentric Global Innovations or generate 7.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alphacentric Global Innovation vs. Old Westbury Short Term
Performance |
| Timeline |
| Alphacentric Global |
| Old Westbury Short |
Alphacentric Global and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alphacentric Global and Old Westbury
The main advantage of trading using opposite Alphacentric Global and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphacentric Global 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.The idea behind Alphacentric Global Innovations and Old Westbury Short Term 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.
| Old Westbury vs. Old Westbury All | Old Westbury vs. Old Westbury California | Old Westbury vs. Old Westbury Credit | Old Westbury vs. Old Westbury Fixed |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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