Correlation Between Old Westbury and Growth Equity
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Growth Equity 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 Growth Equity 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 Growth Equity Investor, you can compare the effects of market volatilities on Old Westbury and Growth Equity 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 Growth Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Growth Equity.
Diversification Opportunities for Old Westbury and Growth Equity
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Old and Growth is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Municipal and Growth Equity Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Growth Equity Investor 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 Growth Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Growth Equity Investor has no effect on the direction of Old Westbury i.e., Old Westbury and Growth Equity go up and down completely randomly.
Pair Corralation between Old Westbury and Growth Equity
Assuming the 90 days horizon Old Westbury Municipal is expected to generate 0.04 times more return on investment than Growth Equity. However, Old Westbury Municipal is 27.73 times less risky than Growth Equity. It trades about 0.58 of its potential returns per unit of risk. Growth Equity Investor is currently generating about -0.16 per unit of risk. If you would invest 1,149 in Old Westbury Municipal on September 13, 2024 and sell it today you would earn a total of 13.00 from holding Old Westbury Municipal or generate 1.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Westbury Municipal vs. Growth Equity Investor
Performance |
| Timeline |
| Old Westbury Municipal |
| Growth Equity Investor |
Old Westbury and Growth Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Growth Equity
The main advantage of trading using opposite Old Westbury and Growth Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Growth Equity 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 Growth Equity will offset losses from the drop in Growth Equity's long position.| Old Westbury vs. Boston Partners Small | Old Westbury vs. Royce Opportunity Fund | Old Westbury vs. Queens Road Small | Old Westbury vs. Lsv Small Cap |
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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