Correlation Between Old Westbury and First Eagle
Can any of the company-specific risk be diversified away by investing in both Old Westbury and First Eagle 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 First Eagle 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 First Eagle Small, you can compare the effects of market volatilities on Old Westbury and First Eagle 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 First Eagle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and First Eagle.
Diversification Opportunities for Old Westbury and First Eagle
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Old and First is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Large and First Eagle Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Eagle Small 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 First Eagle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Eagle Small has no effect on the direction of Old Westbury i.e., Old Westbury and First Eagle go up and down completely randomly.
Pair Corralation between Old Westbury and First Eagle
Assuming the 90 days horizon Old Westbury Large is expected to generate 0.53 times more return on investment than First Eagle. However, Old Westbury Large is 1.88 times less risky than First Eagle. It trades about -0.12 of its potential returns per unit of risk. First Eagle Small is currently generating about -0.32 per unit of risk. If you would invest 2,024 in Old Westbury Large on December 4, 2024 and sell it today you would lose (32.00) from holding Old Westbury Large or give up 1.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Old Westbury Large vs. First Eagle Small
Performance |
| Timeline |
| Old Westbury Large |
| First Eagle Small |
Old Westbury and First Eagle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and First Eagle
The main advantage of trading using opposite Old Westbury and First Eagle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, First Eagle 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 First Eagle will offset losses from the drop in First Eagle's long position.| Old Westbury vs. Invesco Vertible Securities | Old Westbury vs. Gabelli Convertible And | Old Westbury vs. Lord Abbett Vertible | Old Westbury vs. Absolute Convertible Arbitrage |
| First Eagle vs. Rbb Fund Trust | First Eagle vs. Goldman Sachs Global | First Eagle vs. Ab Global Real | First Eagle vs. Legg Mason Bw |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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