Correlation Between Old Westbury and Aim Investment
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Aim Investment 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 Aim Investment 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 Aim Investment Secs, you can compare the effects of market volatilities on Old Westbury and Aim Investment 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 Aim Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Aim Investment.
Diversification Opportunities for Old Westbury and Aim Investment
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Old and Aim is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Large and Aim Investment Secs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aim Investment Secs 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 Aim Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aim Investment Secs has no effect on the direction of Old Westbury i.e., Old Westbury and Aim Investment go up and down completely randomly.
Pair Corralation between Old Westbury and Aim Investment
Assuming the 90 days horizon Old Westbury Large is expected to generate 4.56 times more return on investment than Aim Investment. However, Old Westbury is 4.56 times more volatile than Aim Investment Secs. It trades about 0.17 of its potential returns per unit of risk. Aim Investment Secs is currently generating about 0.13 per unit of risk. If you would invest 2,025 in Old Westbury Large on September 12, 2024 and sell it today you would earn a total of 126.00 from holding Old Westbury Large or generate 6.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Westbury Large vs. Aim Investment Secs
Performance |
| Timeline |
| Old Westbury Large |
| Aim Investment Secs |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Old Westbury and Aim Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Aim Investment
The main advantage of trading using opposite Old Westbury and Aim Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Aim Investment 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 Aim Investment will offset losses from the drop in Aim Investment's long position.| Old Westbury vs. Prudential Government Income | Old Westbury vs. Franklin Adjustable Government | Old Westbury vs. Payden Government Fund | Old Westbury vs. Short Term Government Fund |
| Aim Investment vs. Vy Columbia Small | Aim Investment vs. Ab Small Cap | Aim Investment vs. Ab Small Cap | Aim Investment vs. Smallcap Growth 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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