Correlation Between Old Westbury and First Investors
Can any of the company-specific risk be diversified away by investing in both Old Westbury and First Investors 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 First Investors 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 First Investors Opportunity, you can compare the effects of market volatilities on Old Westbury and First Investors 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 First Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and First Investors.
Diversification Opportunities for Old Westbury and First Investors
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Old and First is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Municipal and First Investors Opportunity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Investors Oppo 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 First Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Investors Oppo has no effect on the direction of Old Westbury i.e., Old Westbury and First Investors go up and down completely randomly.
Pair Corralation between Old Westbury and First Investors
Assuming the 90 days horizon Old Westbury is expected to generate 10.68 times less return on investment than First Investors. But when comparing it to its historical volatility, Old Westbury Municipal is 4.82 times less risky than First Investors. It trades about 0.13 of its potential returns per unit of risk. First Investors Opportunity is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 3,415 in First Investors Opportunity on November 2, 2024 and sell it today you would earn a total of 170.00 from holding First Investors Opportunity or generate 4.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Old Westbury Municipal vs. First Investors Opportunity
Performance |
| Timeline |
| Old Westbury Municipal |
| First Investors Oppo |
Old Westbury and First Investors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and First Investors
The main advantage of trading using opposite Old Westbury and First Investors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, First Investors 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 First Investors will offset losses from the drop in First Investors' long position.| Old Westbury vs. The Equity Growth | Old Westbury vs. T Rowe Price | Old Westbury vs. The Hartford Growth | Old Westbury vs. Eip Growth And |
| First Investors vs. Optimum Small Mid Cap | First Investors vs. Optimum Small Mid Cap | First Investors vs. Ivy Apollo Multi Asset | First Investors vs. Optimum Fixed Income |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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