Correlation Between Old Westbury and Transamerica International
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Transamerica International 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 Transamerica International 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 Transamerica International Equity, you can compare the effects of market volatilities on Old Westbury and Transamerica International 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 Transamerica International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Transamerica International.
Diversification Opportunities for Old Westbury and Transamerica International
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Old and Transamerica is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Large and Transamerica International Equ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Transamerica International 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 Transamerica International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Transamerica International has no effect on the direction of Old Westbury i.e., Old Westbury and Transamerica International go up and down completely randomly.
Pair Corralation between Old Westbury and Transamerica International
Assuming the 90 days horizon Old Westbury Large is expected to generate 0.72 times more return on investment than Transamerica International. However, Old Westbury Large is 1.38 times less risky than Transamerica International. It trades about 0.34 of its potential returns per unit of risk. Transamerica International Equity is currently generating about 0.01 per unit of risk. If you would invest 2,063 in Old Westbury Large on September 3, 2024 and sell it today you would earn a total of 87.00 from holding Old Westbury Large or generate 4.22% 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. Transamerica International Equ
Performance |
| Timeline |
| Old Westbury Large |
| Transamerica International |
Old Westbury and Transamerica International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Transamerica International
The main advantage of trading using opposite Old Westbury and Transamerica International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Transamerica International 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 Transamerica International will offset losses from the drop in Transamerica International's long position.| Old Westbury vs. American Funds New | Old Westbury vs. American Funds New | Old Westbury vs. New Perspective Fund | Old Westbury vs. New Perspective 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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