Correlation Between Old Westbury and Baron Select
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Baron 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 Baron 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 Baron Select Funds, you can compare the effects of market volatilities on Old Westbury and Baron 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 Baron Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Baron Select.
Diversification Opportunities for Old Westbury and Baron Select
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Old and Baron is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Short Term and Baron Select Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baron Select Funds 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 Baron Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baron Select Funds has no effect on the direction of Old Westbury i.e., Old Westbury and Baron Select go up and down completely randomly.
Pair Corralation between Old Westbury and Baron Select
Assuming the 90 days horizon Old Westbury is expected to generate 8.97 times less return on investment than Baron Select. But when comparing it to its historical volatility, Old Westbury Short Term is 10.95 times less risky than Baron Select. It trades about 0.33 of its potential returns per unit of risk. Baron Select Funds is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 1,295 in Baron Select Funds on September 13, 2024 and sell it today you would earn a total of 81.00 from holding Baron Select Funds or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Westbury Short Term vs. Baron Select Funds
Performance |
| Timeline |
| Old Westbury Short |
| Baron Select Funds |
Old Westbury and Baron Select Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Baron Select
The main advantage of trading using opposite Old Westbury and Baron Select positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Baron 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 Baron Select will offset losses from the drop in Baron Select's long position.| Old Westbury vs. Commonwealth Global Fund | Old Westbury vs. Artisan Global Unconstrained | Old Westbury vs. 361 Global Longshort | Old Westbury vs. Kinetics Global Fund |
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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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