Correlation Between Old Westbury and Gotham Neutral
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Gotham Neutral 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 Gotham Neutral 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 Gotham Neutral Fund, you can compare the effects of market volatilities on Old Westbury and Gotham Neutral 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 Gotham Neutral. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Gotham Neutral.
Diversification Opportunities for Old Westbury and Gotham Neutral
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Old and Gotham is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Short Term and Gotham Neutral Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gotham Neutral 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 Gotham Neutral. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gotham Neutral has no effect on the direction of Old Westbury i.e., Old Westbury and Gotham Neutral go up and down completely randomly.
Pair Corralation between Old Westbury and Gotham Neutral
Assuming the 90 days horizon Old Westbury Short Term is expected to generate 0.29 times more return on investment than Gotham Neutral. However, Old Westbury Short Term is 3.49 times less risky than Gotham Neutral. It trades about 0.26 of its potential returns per unit of risk. Gotham Neutral Fund is currently generating about -0.07 per unit of risk. If you would invest 1,013 in Old Westbury Short Term on September 12, 2024 and sell it today you would earn a total of 6.00 from holding Old Westbury Short Term or generate 0.59% 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. Gotham Neutral Fund
Performance |
| Timeline |
| Old Westbury Short |
| Gotham Neutral |
Old Westbury and Gotham Neutral Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Gotham Neutral
The main advantage of trading using opposite Old Westbury and Gotham Neutral positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Gotham Neutral 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 Gotham Neutral will offset losses from the drop in Gotham Neutral's long position.| Old Westbury vs. SCOR PK | Old Westbury vs. Morningstar Unconstrained Allocation | Old Westbury vs. Via Renewables | Old Westbury vs. Bondbloxx ETF Trust |
| Gotham Neutral vs. Commonwealth Global Fund | Gotham Neutral vs. Qs Growth Fund | Gotham Neutral vs. Multimedia Portfolio Multimedia | Gotham Neutral vs. Auer Growth Fund |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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