Correlation Between Old Westbury and Ivy Energy
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Ivy Energy 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 Ivy Energy 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 Ivy Energy Fund, you can compare the effects of market volatilities on Old Westbury and Ivy Energy 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 Ivy Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Ivy Energy.
Diversification Opportunities for Old Westbury and Ivy Energy
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Old and Ivy is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Large and Ivy Energy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ivy Energy Fund 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 Ivy Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ivy Energy Fund has no effect on the direction of Old Westbury i.e., Old Westbury and Ivy Energy go up and down completely randomly.
Pair Corralation between Old Westbury and Ivy Energy
Assuming the 90 days horizon Old Westbury is expected to generate 1.83 times less return on investment than Ivy Energy. But when comparing it to its historical volatility, Old Westbury Large is 1.28 times less risky than Ivy Energy. It trades about 0.09 of its potential returns per unit of risk. Ivy Energy Fund is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 976.00 in Ivy Energy Fund on September 13, 2024 and sell it today you would earn a total of 16.00 from holding Ivy Energy Fund or generate 1.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Westbury Large vs. Ivy Energy Fund
Performance |
| Timeline |
| Old Westbury Large |
| Ivy Energy Fund |
Old Westbury and Ivy Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Ivy Energy
The main advantage of trading using opposite Old Westbury and Ivy Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Ivy Energy 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 Ivy Energy will offset losses from the drop in Ivy Energy'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 |
| Ivy Energy vs. Ivy Large Cap | Ivy Energy vs. Ivy Small Cap | Ivy Energy vs. Ivy High Income | Ivy Energy vs. Ivy Apollo Multi Asset |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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