Correlation Between Old Westbury and Investec Emerging
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Investec Emerging 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 Investec Emerging 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 Investec Emerging Markets, you can compare the effects of market volatilities on Old Westbury and Investec Emerging 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 Investec Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Investec Emerging.
Diversification Opportunities for Old Westbury and Investec Emerging
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Old and Investec is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Large and Investec Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investec Emerging Markets 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 Investec Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investec Emerging Markets has no effect on the direction of Old Westbury i.e., Old Westbury and Investec Emerging go up and down completely randomly.
Pair Corralation between Old Westbury and Investec Emerging
Assuming the 90 days horizon Old Westbury Large is expected to generate 0.84 times more return on investment than Investec Emerging. However, Old Westbury Large is 1.19 times less risky than Investec Emerging. It trades about 0.11 of its potential returns per unit of risk. Investec Emerging Markets is currently generating about -0.16 per unit of risk. If you would invest 2,086 in Old Westbury Large on August 25, 2024 and sell it today you would earn a total of 33.00 from holding Old Westbury Large or generate 1.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Westbury Large vs. Investec Emerging Markets
Performance |
| Timeline |
| Old Westbury Large |
| Investec Emerging Markets |
Old Westbury and Investec Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Investec Emerging
The main advantage of trading using opposite Old Westbury and Investec Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Investec Emerging 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 Investec Emerging will offset losses from the drop in Investec Emerging's long position.| Old Westbury vs. Rbc Emerging Markets | Old Westbury vs. Artisan Emerging Markets | Old Westbury vs. Dws Emerging Markets | Old Westbury vs. Franklin Emerging Market |
| Investec Emerging vs. Gmo Equity Allocation | Investec Emerging vs. Nuveen Winslow Large Cap | Investec Emerging vs. Old Westbury Large | Investec Emerging vs. Legg Mason Bw |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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