Correlation Between Old Westbury and Federated Ultrashort
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Federated Ultrashort 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 Federated Ultrashort 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 Federated Ultrashort Bond, you can compare the effects of market volatilities on Old Westbury and Federated Ultrashort 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 Federated Ultrashort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Federated Ultrashort.
Diversification Opportunities for Old Westbury and Federated Ultrashort
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Old and FEDERATED is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Short Term and Federated Ultrashort Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Ultrashort Bond 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 Federated Ultrashort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Ultrashort Bond has no effect on the direction of Old Westbury i.e., Old Westbury and Federated Ultrashort go up and down completely randomly.
Pair Corralation between Old Westbury and Federated Ultrashort
Assuming the 90 days horizon Old Westbury Short Term is expected to generate 1.89 times more return on investment than Federated Ultrashort. However, Old Westbury is 1.89 times more volatile than Federated Ultrashort Bond. It trades about 0.2 of its potential returns per unit of risk. Federated Ultrashort Bond is currently generating about 0.08 per unit of risk. If you would invest 1,013 in Old Westbury Short Term on September 2, 2024 and sell it today you would earn a total of 5.00 from holding Old Westbury Short Term or generate 0.49% 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. Federated Ultrashort Bond
Performance |
| Timeline |
| Old Westbury Short |
| Federated Ultrashort Bond |
Old Westbury and Federated Ultrashort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Federated Ultrashort
The main advantage of trading using opposite Old Westbury and Federated Ultrashort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Federated Ultrashort 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 Federated Ultrashort will offset losses from the drop in Federated Ultrashort's long position.| Old Westbury vs. The Gabelli Equity | Old Westbury vs. Icon Equity Income | Old Westbury vs. Balanced Fund Retail | Old Westbury vs. Sarofim Equity |
| Federated Ultrashort vs. Rationalpier 88 Convertible | Federated Ultrashort vs. Ab Bond Inflation | Federated Ultrashort vs. Ms Global Fixed | Federated Ultrashort vs. Calamos Dynamic Convertible |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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