Correlation Between Old Westbury and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Emerging Markets 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 Emerging Markets 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 Emerging Markets Leaders, you can compare the effects of market volatilities on Old Westbury and Emerging Markets 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 Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Emerging Markets.
Diversification Opportunities for Old Westbury and Emerging Markets
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Old and Emerging is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Short Term and Emerging Markets Leaders in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Leaders 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 Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Leaders has no effect on the direction of Old Westbury i.e., Old Westbury and Emerging Markets go up and down completely randomly.
Pair Corralation between Old Westbury and Emerging Markets
If you would invest 1,008 in Old Westbury Short Term on October 21, 2024 and sell it today you would earn a total of 3.00 from holding Old Westbury Short Term or generate 0.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 5.26% |
| Values | Daily Returns |
Old Westbury Short Term vs. Emerging Markets Leaders
Performance |
| Timeline |
| Old Westbury Short |
| Emerging Markets Leaders |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Old Westbury and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Emerging Markets
The main advantage of trading using opposite Old Westbury and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Old Westbury vs. Siit High Yield | Old Westbury vs. Ab High Income | Old Westbury vs. Dunham High Yield | Old Westbury vs. Americafirst Monthly Risk On |
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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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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