Correlation Between Old Westbury and New Perspective
Can any of the company-specific risk be diversified away by investing in both Old Westbury and New Perspective 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 New Perspective 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 New Perspective Fund, you can compare the effects of market volatilities on Old Westbury and New Perspective 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 New Perspective. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and New Perspective.
Diversification Opportunities for Old Westbury and New Perspective
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Old and New is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Large and New Perspective Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Perspective 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 New Perspective. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Perspective has no effect on the direction of Old Westbury i.e., Old Westbury and New Perspective go up and down completely randomly.
Pair Corralation between Old Westbury and New Perspective
Assuming the 90 days horizon Old Westbury Large is expected to generate 0.9 times more return on investment than New Perspective. However, Old Westbury Large is 1.11 times less risky than New Perspective. It trades about -0.25 of its potential returns per unit of risk. New Perspective Fund is currently generating about -0.25 per unit of risk. If you would invest 1,929 in Old Westbury Large on January 7, 2025 and sell it today you would lose (167.00) from holding Old Westbury Large or give up 8.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Westbury Large vs. New Perspective Fund
Performance |
| Timeline |
| Old Westbury Large |
| New Perspective |
Old Westbury and New Perspective Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and New Perspective
The main advantage of trading using opposite Old Westbury and New Perspective positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, New Perspective 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 New Perspective will offset losses from the drop in New Perspective's long position.| Old Westbury vs. Principal Lifetime Hybrid | Old Westbury vs. Summit Global Investments | Old Westbury vs. Touchstone Large Cap | Old Westbury vs. Qs Defensive Growth |
| New Perspective vs. Lord Abbett Affiliated | New Perspective vs. Oakmark Select Fund | New Perspective vs. Large Cap Fund | New Perspective vs. Allianzgi Nfj Large Cap |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |