Correlation Between Old Westbury and Navigator Equity
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Navigator Equity 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 Navigator Equity 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 Navigator Equity Hedged, you can compare the effects of market volatilities on Old Westbury and Navigator Equity 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 Navigator Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Navigator Equity.
Diversification Opportunities for Old Westbury and Navigator Equity
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Old and Navigator is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Large and Navigator Equity Hedged in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Navigator Equity Hedged 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 Navigator Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Navigator Equity Hedged has no effect on the direction of Old Westbury i.e., Old Westbury and Navigator Equity go up and down completely randomly.
Pair Corralation between Old Westbury and Navigator Equity
Assuming the 90 days horizon Old Westbury is expected to generate 21.38 times less return on investment than Navigator Equity. But when comparing it to its historical volatility, Old Westbury Large is 35.48 times less risky than Navigator Equity. It trades about 0.14 of its potential returns per unit of risk. Navigator Equity Hedged is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 160,667 in Navigator Equity Hedged on September 15, 2024 and sell it today you would earn a total of 4,343 from holding Navigator Equity Hedged or generate 2.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 19.33% |
| Values | Daily Returns |
Old Westbury Large vs. Navigator Equity Hedged
Performance |
| Timeline |
| Old Westbury Large |
| Navigator Equity Hedged |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Strong
Old Westbury and Navigator Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Navigator Equity
The main advantage of trading using opposite Old Westbury and Navigator Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Navigator Equity 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 Navigator Equity will offset losses from the drop in Navigator Equity's long position.| Old Westbury vs. Putnman Retirement Ready | Old Westbury vs. Jpmorgan Smartretirement 2035 | Old Westbury vs. Pro Blend Moderate Term | Old Westbury vs. Transamerica Cleartrack Retirement |
| Navigator Equity vs. Navigator Equity Hedged | Navigator Equity vs. Northern Lights | Navigator Equity vs. Navigator Tactical Fixed | Navigator Equity vs. Navigator Tactical Fixed |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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