Correlation Between Old Westbury and Value Fund
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Value Fund 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 Value Fund 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 Value Fund Value, you can compare the effects of market volatilities on Old Westbury and Value Fund 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 Value Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Value Fund.
Diversification Opportunities for Old Westbury and Value Fund
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Old and Value is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Municipal and Value Fund Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Value Fund Value 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 Value Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Value Fund Value has no effect on the direction of Old Westbury i.e., Old Westbury and Value Fund go up and down completely randomly.
Pair Corralation between Old Westbury and Value Fund
Assuming the 90 days horizon Old Westbury Municipal is expected to generate 0.14 times more return on investment than Value Fund. However, Old Westbury Municipal is 7.34 times less risky than Value Fund. It trades about 0.02 of its potential returns per unit of risk. Value Fund Value is currently generating about -0.02 per unit of risk. If you would invest 1,135 in Old Westbury Municipal on October 26, 2024 and sell it today you would earn a total of 6.00 from holding Old Westbury Municipal or generate 0.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Westbury Municipal vs. Value Fund Value
Performance |
| Timeline |
| Old Westbury Municipal |
| Value Fund Value |
Old Westbury and Value Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Value Fund
The main advantage of trading using opposite Old Westbury and Value Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Value Fund 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 Value Fund will offset losses from the drop in Value Fund's long position.| Old Westbury vs. Nuveen Strategic Municipal | Old Westbury vs. Transamerica Intermediate Muni | Old Westbury vs. Morningstar Municipal Bond | Old Westbury vs. Virtus Seix Government |
| Value Fund vs. American High Income Municipal | Value Fund vs. Nuveen Strategic Municipal | Value Fund vs. Old Westbury Municipal | Value Fund vs. Alpine Ultra Short |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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