Correlation Between Old Westbury and Columbia Global
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Columbia 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 Columbia Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Westbury Large and Columbia Global Dividend, you can compare the effects of market volatilities on Old Westbury and Columbia 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 Columbia Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Columbia Global.
Diversification Opportunities for Old Westbury and Columbia Global
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Old and Columbia is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Large and Columbia Global Dividend in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Global Dividend 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 Large are associated (or correlated) with Columbia Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Global Dividend has no effect on the direction of Old Westbury i.e., Old Westbury and Columbia Global go up and down completely randomly.
Pair Corralation between Old Westbury and Columbia Global
Assuming the 90 days horizon Old Westbury Large is expected to generate 0.97 times more return on investment than Columbia Global. However, Old Westbury Large is 1.04 times less risky than Columbia Global. It trades about 0.12 of its potential returns per unit of risk. Columbia Global Dividend is currently generating about 0.04 per unit of risk. If you would invest 1,736 in Old Westbury Large on September 14, 2024 and sell it today you would earn a total of 431.00 from holding Old Westbury Large or generate 24.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.56% |
| Values | Daily Returns |
Old Westbury Large vs. Columbia Global Dividend
Performance |
| Timeline |
| Old Westbury Large |
| Columbia Global Dividend |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Old Westbury and Columbia Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Columbia Global
The main advantage of trading using opposite Old Westbury and Columbia Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Columbia 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 Columbia Global will offset losses from the drop in Columbia Global's long position.| Old Westbury vs. Old Westbury All | Old Westbury vs. Old Westbury California | Old Westbury vs. Old Westbury Credit | Old Westbury vs. Old Westbury Fixed |
| Columbia Global vs. Columbia Porate Income | Columbia Global vs. Columbia Ultra Short | Columbia Global vs. Columbia Treasury Index | Columbia Global vs. Multi Manager Directional Alternative |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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