Correlation Between Old Westbury and Ab Select
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Ab Select 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 Ab Select into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Westbury Short Term and Ab Select Longshort, you can compare the effects of market volatilities on Old Westbury and Ab Select 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 Ab Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Ab Select.
Diversification Opportunities for Old Westbury and Ab Select
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Old and ASCLX is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Short Term and Ab Select Longshort in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Select Longshort 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 Short Term are associated (or correlated) with Ab Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Select Longshort has no effect on the direction of Old Westbury i.e., Old Westbury and Ab Select go up and down completely randomly.
Pair Corralation between Old Westbury and Ab Select
Assuming the 90 days horizon Old Westbury is expected to generate 2.47 times less return on investment than Ab Select. But when comparing it to its historical volatility, Old Westbury Short Term is 5.23 times less risky than Ab Select. It trades about 0.17 of its potential returns per unit of risk. Ab Select Longshort is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 1,094 in Ab Select Longshort on November 19, 2024 and sell it today you would earn a total of 239.00 from holding Ab Select Longshort or generate 21.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 53.54% |
| Values | Daily Returns |
Old Westbury Short Term vs. Ab Select Longshort
Performance |
| Timeline |
| Old Westbury Short |
| Ab Select Longshort |
Old Westbury and Ab Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Ab Select
The main advantage of trading using opposite Old Westbury and Ab Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Ab Select 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 Ab Select will offset losses from the drop in Ab Select's long position.| Old Westbury vs. First Eagle Gold | Old Westbury vs. Franklin Gold Precious | Old Westbury vs. Invesco Gold Special | Old Westbury vs. Deutsche Gold Precious |
| Ab Select vs. Artisan Developing World | Ab Select vs. Oklahoma College Savings | Ab Select vs. Harding Loevner International | Ab Select vs. Barings Emerging Markets |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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