Correlation Between Old Westbury and Hartford Municipal
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Hartford Municipal 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 Hartford Municipal 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 Hartford Municipal Income, you can compare the effects of market volatilities on Old Westbury and Hartford Municipal 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 Hartford Municipal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Hartford Municipal.
Diversification Opportunities for Old Westbury and Hartford Municipal
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Old and HARTFORD is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Municipal and Hartford Municipal Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford Municipal Income 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 Hartford Municipal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Municipal Income has no effect on the direction of Old Westbury i.e., Old Westbury and Hartford Municipal go up and down completely randomly.
Pair Corralation between Old Westbury and Hartford Municipal
Assuming the 90 days horizon Old Westbury Municipal is expected to generate 0.97 times more return on investment than Hartford Municipal. However, Old Westbury Municipal is 1.03 times less risky than Hartford Municipal. It trades about 0.06 of its potential returns per unit of risk. Hartford Municipal Income is currently generating about 0.0 per unit of risk. If you would invest 1,138 in Old Westbury Municipal on October 23, 2024 and sell it today you would earn a total of 2.00 from holding Old Westbury Municipal or generate 0.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Westbury Municipal vs. Hartford Municipal Income
Performance |
| Timeline |
| Old Westbury Municipal |
| Hartford Municipal Income |
Old Westbury and Hartford Municipal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Hartford Municipal
The main advantage of trading using opposite Old Westbury and Hartford Municipal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Hartford Municipal 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 Hartford Municipal will offset losses from the drop in Hartford Municipal's long position.| Old Westbury vs. Rbc Short Duration | Old Westbury vs. Touchstone Ultra Short | Old Westbury vs. Siit Ultra Short | Old Westbury vs. Jhancock Short Duration |
| Hartford Municipal vs. The Hartford Growth | Hartford Municipal vs. The Hartford Growth | Hartford Municipal vs. The Hartford Growth | Hartford Municipal vs. The Hartford Growth |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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