Correlation Between Old Westbury and Gurtin National
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Gurtin National 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 Gurtin National 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 Gurtin National Muni, you can compare the effects of market volatilities on Old Westbury and Gurtin National 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 Gurtin National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Gurtin National.
Diversification Opportunities for Old Westbury and Gurtin National
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Old and Gurtin is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Short Term and Gurtin National Muni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gurtin National Muni 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 Gurtin National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gurtin National Muni has no effect on the direction of Old Westbury i.e., Old Westbury and Gurtin National go up and down completely randomly.
Pair Corralation between Old Westbury and Gurtin National
Assuming the 90 days horizon Old Westbury Short Term is expected to generate 0.72 times more return on investment than Gurtin National. However, Old Westbury Short Term is 1.39 times less risky than Gurtin National. It trades about 0.19 of its potential returns per unit of risk. Gurtin National Muni is currently generating about 0.07 per unit of risk. If you would invest 971.00 in Old Westbury Short Term on December 11, 2024 and sell it today you would earn a total of 52.00 from holding Old Westbury Short Term or generate 5.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 88.93% |
| Values | Daily Returns |
Old Westbury Short Term vs. Gurtin National Muni
Performance |
| Timeline |
| Old Westbury Short |
| Gurtin National Muni |
Old Westbury and Gurtin National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Gurtin National
The main advantage of trading using opposite Old Westbury and Gurtin National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Gurtin National 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 Gurtin National will offset losses from the drop in Gurtin National's long position.| Old Westbury vs. Siit Ultra Short | ||
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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