Correlation Between Old Westbury and Fidelity Income
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Fidelity Income 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 Fidelity Income 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 Fidelity Income Replacement, you can compare the effects of market volatilities on Old Westbury and Fidelity Income 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 Fidelity Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Fidelity Income.
Diversification Opportunities for Old Westbury and Fidelity Income
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Old and Fidelity is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Short Term and Fidelity Income Replacement in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity Income Repl 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 Fidelity Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity Income Repl has no effect on the direction of Old Westbury i.e., Old Westbury and Fidelity Income go up and down completely randomly.
Pair Corralation between Old Westbury and Fidelity Income
Assuming the 90 days horizon Old Westbury is expected to generate 1.65 times less return on investment than Fidelity Income. But when comparing it to its historical volatility, Old Westbury Short Term is 2.81 times less risky than Fidelity Income. It trades about 0.21 of its potential returns per unit of risk. Fidelity Income Replacement is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 5,085 in Fidelity Income Replacement on September 3, 2024 and sell it today you would earn a total of 299.00 from holding Fidelity Income Replacement or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Westbury Short Term vs. Fidelity Income Replacement
Performance |
| Timeline |
| Old Westbury Short |
| Fidelity Income Repl |
Old Westbury and Fidelity Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Fidelity Income
The main advantage of trading using opposite Old Westbury and Fidelity Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Fidelity Income 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 Fidelity Income will offset losses from the drop in Fidelity Income's long position.| Old Westbury vs. SPACE | Old Westbury vs. Bayview Acquisition Corp | Old Westbury vs. Ampleforth | Old Westbury vs. ionet |
| Fidelity Income vs. Federated Short Term Income | Fidelity Income vs. Old Westbury Short Term | Fidelity Income vs. Astor Longshort Fund | Fidelity Income vs. Sterling Capital 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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