Correlation Between Arrow Managed and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Arrow Managed 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 Arrow Managed and Old Westbury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Arrow Managed Futures and Old Westbury Large, you can compare the effects of market volatilities on Arrow Managed 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 Arrow Managed with a short position of Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arrow Managed and Old Westbury.
Diversification Opportunities for Arrow Managed and Old Westbury
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Arrow and Old is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Arrow Managed Futures 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 Arrow Managed 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 Arrow Managed Futures 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 Arrow Managed i.e., Arrow Managed and Old Westbury go up and down completely randomly.
Pair Corralation between Arrow Managed and Old Westbury
Assuming the 90 days horizon Arrow Managed is expected to generate 19.69 times less return on investment than Old Westbury. In addition to that, Arrow Managed is 2.06 times more volatile than Old Westbury Large. It trades about 0.0 of its total potential returns per unit of risk. Old Westbury Large is currently generating about 0.11 per unit of volatility. If you would invest 1,450 in Old Westbury Large on September 20, 2024 and sell it today you would earn a total of 702.00 from holding Old Westbury Large or generate 48.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Arrow Managed Futures vs. Old Westbury Large
Performance |
| Timeline |
| Arrow Managed Futures |
| Old Westbury Large |
Arrow Managed and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Arrow Managed and Old Westbury
The main advantage of trading using opposite Arrow Managed and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Arrow Managed 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.| Arrow Managed vs. Arrow Managed Futures | Arrow Managed vs. Arrow Dwa Balanced | Arrow Managed vs. Arrow Dwa Balanced | Arrow Managed vs. Arrow Dwa Balanced |
| Old Westbury vs. Arrow Managed Futures | Old Westbury vs. Guggenheim Managed Futures | Old Westbury vs. Deutsche Global Inflation | Old Westbury vs. Simt Multi Asset Inflation |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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