Correlation Between International Investors and Old Westbury
Can any of the company-specific risk be diversified away by investing in both International Investors 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 International Investors and Old Westbury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Investors Gold and Old Westbury Municipal, you can compare the effects of market volatilities on International Investors 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 International Investors with a short position of Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Investors and Old Westbury.
Diversification Opportunities for International Investors and Old Westbury
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INTERNATIONAL and Old is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding International Investors Gold and Old Westbury Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Municipal and International Investors 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 International Investors Gold 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 Municipal has no effect on the direction of International Investors i.e., International Investors and Old Westbury go up and down completely randomly.
Pair Corralation between International Investors and Old Westbury
Assuming the 90 days horizon International Investors Gold is expected to generate 10.59 times more return on investment than Old Westbury. However, International Investors is 10.59 times more volatile than Old Westbury Municipal. It trades about 0.05 of its potential returns per unit of risk. Old Westbury Municipal is currently generating about 0.14 per unit of risk. If you would invest 889.00 in International Investors Gold on September 1, 2024 and sell it today you would earn a total of 88.00 from holding International Investors Gold or generate 9.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Investors Gold vs. Old Westbury Municipal
Performance |
| Timeline |
| International Investors |
| Old Westbury Municipal |
International Investors and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Investors and Old Westbury
The main advantage of trading using opposite International Investors and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Investors 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 International Investors Gold and Old Westbury Municipal 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. Global Gold Fund | Old Westbury vs. Goldman Sachs Clean | Old Westbury vs. International Investors Gold | Old Westbury vs. Gold And Precious |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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