Correlation Between Old Westbury and Ab Bond
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Ab Bond 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 Ab Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Westbury Municipal and Ab Bond Inflation, you can compare the effects of market volatilities on Old Westbury and Ab Bond 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 Ab Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Ab Bond.
Diversification Opportunities for Old Westbury and Ab Bond
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Old and ANBIX is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Municipal and Ab Bond Inflation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Bond Inflation 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 Municipal are associated (or correlated) with Ab Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Bond Inflation has no effect on the direction of Old Westbury i.e., Old Westbury and Ab Bond go up and down completely randomly.
Pair Corralation between Old Westbury and Ab Bond
Assuming the 90 days horizon Old Westbury Municipal is expected to generate 1.23 times more return on investment than Ab Bond. However, Old Westbury is 1.23 times more volatile than Ab Bond Inflation. It trades about 0.14 of its potential returns per unit of risk. Ab Bond Inflation is currently generating about 0.05 per unit of risk. If you would invest 1,147 in Old Westbury Municipal on August 27, 2024 and sell it today you would earn a total of 7.00 from holding Old Westbury Municipal or generate 0.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Westbury Municipal vs. Ab Bond Inflation
Performance |
| Timeline |
| Old Westbury Municipal |
| Ab Bond Inflation |
Old Westbury and Ab Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Ab Bond
The main advantage of trading using opposite Old Westbury and Ab Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Ab Bond 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 Ab Bond will offset losses from the drop in Ab Bond's long position.| Old Westbury vs. Nuveen Minnesota Municipal | Old Westbury vs. Morningstar Defensive Bond | Old Westbury vs. Intermediate Term Bond Fund | Old Westbury vs. Ishares Municipal Bond |
| Ab Bond vs. Ab Global E | Ab Bond vs. Ab Global E | Ab Bond vs. Ab Global E | Ab Bond vs. Ab Minnesota Portfolio |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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