Correlation Between Old Westbury and Icon Equity
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Icon Equity 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 Icon Equity 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 Icon Equity Income, you can compare the effects of market volatilities on Old Westbury and Icon Equity 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 Icon Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Icon Equity.
Diversification Opportunities for Old Westbury and Icon Equity
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Old and ICON is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Short Term and Icon Equity Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Equity Income 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 Icon Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Equity Income has no effect on the direction of Old Westbury i.e., Old Westbury and Icon Equity go up and down completely randomly.
Pair Corralation between Old Westbury and Icon Equity
Assuming the 90 days horizon Old Westbury is expected to generate 3.6 times less return on investment than Icon Equity. But when comparing it to its historical volatility, Old Westbury Short Term is 5.39 times less risky than Icon Equity. It trades about 0.2 of its potential returns per unit of risk. Icon Equity Income is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,558 in Icon Equity Income on August 31, 2024 and sell it today you would earn a total of 173.00 from holding Icon Equity Income or generate 11.1% 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. Icon Equity Income
Performance |
| Timeline |
| Old Westbury Short |
| Icon Equity Income |
Old Westbury and Icon Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Icon Equity
The main advantage of trading using opposite Old Westbury and Icon Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Icon Equity 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 Icon Equity will offset losses from the drop in Icon Equity's long position.| Old Westbury vs. American Century High | Old Westbury vs. Fidelity Capital Income | Old Westbury vs. Pioneer High Yield | Old Westbury vs. Western Asset High |
| Icon Equity vs. Fidelity Advisor Gold | Icon Equity vs. Gamco Global Gold | Icon Equity vs. International Investors Gold | Icon Equity vs. Oppenheimer Gold Special |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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