Correlation Between Old Westbury and Federated High
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Federated High 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 Old Westbury and Federated High into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Westbury Fixed and Federated High Yield, you can compare the effects of market volatilities on Old Westbury and Federated High 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 Old Westbury with a short position of Federated High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Federated High.
Diversification Opportunities for Old Westbury and Federated High
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Old and Federated is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Fixed and Federated High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated High Yield and Old Westbury 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 Old Westbury Fixed are associated (or correlated) with Federated High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated High Yield has no effect on the direction of Old Westbury i.e., Old Westbury and Federated High go up and down completely randomly.
Pair Corralation between Old Westbury and Federated High
Assuming the 90 days horizon Old Westbury Fixed is expected to under-perform the Federated High. In addition to that, Old Westbury is 1.02 times more volatile than Federated High Yield. It trades about -0.04 of its total potential returns per unit of risk. Federated High Yield is currently generating about 0.13 per unit of volatility. If you would invest 623.00 in Federated High Yield on November 2, 2024 and sell it today you would earn a total of 18.00 from holding Federated High Yield or generate 2.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Westbury Fixed vs. Federated High Yield
Performance |
| Timeline |
| Old Westbury Fixed |
| Federated High Yield |
Old Westbury and Federated High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Federated High
The main advantage of trading using opposite Old Westbury and Federated High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Federated High 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 Federated High will offset losses from the drop in Federated High's long position.| Old Westbury vs. Astoncrosswind Small Cap | Old Westbury vs. Smallcap Fund Fka | Old Westbury vs. Rbc Small Cap | Old Westbury vs. Sp Smallcap 600 |
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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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