Correlation Between Old Westbury and Large-cap Growth
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Large-cap Growth 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 Large-cap Growth 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 Large Cap Growth Profund, you can compare the effects of market volatilities on Old Westbury and Large-cap Growth 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 Large-cap Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Large-cap Growth.
Diversification Opportunities for Old Westbury and Large-cap Growth
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Old and Large-cap is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Fixed and Large Cap Growth Profund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Large Cap Growth 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 Large-cap Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Large Cap Growth has no effect on the direction of Old Westbury i.e., Old Westbury and Large-cap Growth go up and down completely randomly.
Pair Corralation between Old Westbury and Large-cap Growth
Assuming the 90 days horizon Old Westbury is expected to generate 2.08 times less return on investment than Large-cap Growth. But when comparing it to its historical volatility, Old Westbury Fixed is 6.15 times less risky than Large-cap Growth. It trades about 0.26 of its potential returns per unit of risk. Large Cap Growth Profund is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 4,593 in Large Cap Growth Profund on November 8, 2024 and sell it today you would earn a total of 103.00 from holding Large Cap Growth Profund or generate 2.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Old Westbury Fixed vs. Large Cap Growth Profund
Performance |
| Timeline |
| Old Westbury Fixed |
| Large Cap Growth |
Old Westbury and Large-cap Growth Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Large-cap Growth
The main advantage of trading using opposite Old Westbury and Large-cap Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Large-cap Growth 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 Large-cap Growth will offset losses from the drop in Large-cap Growth's long position.| Old Westbury vs. Morningstar International Equity | Old Westbury vs. Jhancock Global Equity | Old Westbury vs. Franklin Equity Income | Old Westbury vs. Touchstone International Equity |
| Large-cap Growth vs. Growth Allocation Fund | Large-cap Growth vs. Stringer Growth Fund | Large-cap Growth vs. Growth Portfolio Class | Large-cap Growth vs. Rational Defensive Growth |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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