Correlation Between Old Westbury and Gmo Global
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Gmo Global 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 Gmo Global 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 Gmo Global Equity, you can compare the effects of market volatilities on Old Westbury and Gmo Global 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 Gmo Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Gmo Global.
Diversification Opportunities for Old Westbury and Gmo Global
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Old and Gmo is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Fixed and Gmo Global Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Global Equity 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 Gmo Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Global Equity has no effect on the direction of Old Westbury i.e., Old Westbury and Gmo Global go up and down completely randomly.
Pair Corralation between Old Westbury and Gmo Global
Assuming the 90 days horizon Old Westbury is expected to generate 2.2 times less return on investment than Gmo Global. But when comparing it to its historical volatility, Old Westbury Fixed is 4.05 times less risky than Gmo Global. It trades about 0.08 of its potential returns per unit of risk. Gmo Global Equity is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,735 in Gmo Global Equity on November 3, 2024 and sell it today you would earn a total of 199.00 from holding Gmo Global Equity or generate 7.28% 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. Gmo Global Equity
Performance |
| Timeline |
| Old Westbury Fixed |
| Gmo Global Equity |
Old Westbury and Gmo Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Gmo Global
The main advantage of trading using opposite Old Westbury and Gmo Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Gmo Global 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 Gmo Global will offset losses from the drop in Gmo Global's long position.| Old Westbury vs. Transamerica Intermediate Muni | Old Westbury vs. Hartford Municipal Short | Old Westbury vs. Lind Capital Partners | Old Westbury vs. Jpmorgan Ultra Short Municipal |
| Gmo Global vs. Thrivent Natural Resources | Gmo Global vs. Goehring Rozencwajg Resources | Gmo Global vs. Invesco Energy Fund | Gmo Global vs. World Energy Fund |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |