Correlation Between Old Westbury and Thornburg Strategic
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Thornburg Strategic 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 Thornburg Strategic 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 Thornburg Strategic Municipal, you can compare the effects of market volatilities on Old Westbury and Thornburg Strategic 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 Thornburg Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Thornburg Strategic.
Diversification Opportunities for Old Westbury and Thornburg Strategic
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Old and Thornburg is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Municipal and Thornburg Strategic Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thornburg Strategic 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 Thornburg Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thornburg Strategic has no effect on the direction of Old Westbury i.e., Old Westbury and Thornburg Strategic go up and down completely randomly.
Pair Corralation between Old Westbury and Thornburg Strategic
Assuming the 90 days horizon Old Westbury Municipal is expected to generate 0.96 times more return on investment than Thornburg Strategic. However, Old Westbury Municipal is 1.04 times less risky than Thornburg Strategic. It trades about 0.13 of its potential returns per unit of risk. Thornburg Strategic Municipal is currently generating about 0.04 per unit of risk. If you would invest 1,142 in Old Westbury Municipal on November 3, 2024 and sell it today you would earn a total of 5.00 from holding Old Westbury Municipal or generate 0.44% 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. Thornburg Strategic Municipal
Performance |
| Timeline |
| Old Westbury Municipal |
| Thornburg Strategic |
Old Westbury and Thornburg Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Thornburg Strategic
The main advantage of trading using opposite Old Westbury and Thornburg Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Thornburg Strategic 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 Thornburg Strategic will offset losses from the drop in Thornburg Strategic's long position.| Old Westbury vs. Rbb Fund | Old Westbury vs. Morningstar Global Income | Old Westbury vs. Dws Global Macro | Old Westbury vs. Ab Global Bond |
| Thornburg Strategic vs. Thornburg Value Fund | Thornburg Strategic vs. Thornburg Value Fund | Thornburg Strategic vs. Thornburg New York | Thornburg Strategic vs. Thornburg International Value |
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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