Correlation Between Old Westbury and Scharf Global
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Scharf Global 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 Scharf Global 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 Scharf Global Opportunity, you can compare the effects of market volatilities on Old Westbury and Scharf Global 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 Scharf Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Scharf Global.
Diversification Opportunities for Old Westbury and Scharf Global
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Old and Scharf is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Large and Scharf Global Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scharf Global Opportunity 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 Scharf Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scharf Global Opportunity has no effect on the direction of Old Westbury i.e., Old Westbury and Scharf Global go up and down completely randomly.
Pair Corralation between Old Westbury and Scharf Global
Assuming the 90 days horizon Old Westbury Large is expected to generate 0.98 times more return on investment than Scharf Global. However, Old Westbury Large is 1.02 times less risky than Scharf Global. It trades about 0.29 of its potential returns per unit of risk. Scharf Global Opportunity is currently generating about 0.2 per unit of risk. If you would invest 2,084 in Old Westbury Large on September 6, 2024 and sell it today you would earn a total of 79.00 from holding Old Westbury Large or generate 3.79% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Old Westbury Large vs. Scharf Global Opportunity
Performance |
Timeline |
Old Westbury Large |
Scharf Global Opportunity |
Old Westbury and Scharf Global Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Old Westbury and Scharf Global
The main advantage of trading using opposite Old Westbury and Scharf Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Scharf Global 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 Scharf Global will offset losses from the drop in Scharf Global's long position.Old Westbury vs. American Funds New | Old Westbury vs. New Perspective Fund | Old Westbury vs. New Perspective Fund | Old Westbury vs. New Perspective Fund |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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