Correlation Between Old Westbury and Global Equity
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Global 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 Global 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 Global Equity Fund, you can compare the effects of market volatilities on Old Westbury and Global 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 Global Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Global Equity.
Diversification Opportunities for Old Westbury and Global Equity
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Old and Global is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Short Term and Global Equity Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Equity 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 Global Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Equity has no effect on the direction of Old Westbury i.e., Old Westbury and Global Equity go up and down completely randomly.
Pair Corralation between Old Westbury and Global Equity
Assuming the 90 days horizon Old Westbury is expected to generate 7.89 times less return on investment than Global Equity. But when comparing it to its historical volatility, Old Westbury Short Term is 6.07 times less risky than Global Equity. It trades about 0.19 of its potential returns per unit of risk. Global Equity Fund is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,179 in Global Equity Fund on October 28, 2024 and sell it today you would earn a total of 37.00 from holding Global Equity Fund or generate 3.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Westbury Short Term vs. Global Equity Fund
Performance |
| Timeline |
| Old Westbury Short |
| Global Equity |
Old Westbury and Global Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Global Equity
The main advantage of trading using opposite Old Westbury and Global Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Global 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 Global Equity will offset losses from the drop in Global Equity's long position.| Old Westbury vs. Avantis Short Term Fixed | Old Westbury vs. Virtus Multi Sector Short | Old Westbury vs. Calvert Short Duration | Old Westbury vs. Cmg Ultra Short |
| Global Equity vs. Hartford Healthcare Hls | Global Equity vs. Health Care Fund | Global Equity vs. The Gabelli Healthcare | Global Equity vs. Alphacentric Lifesci Healthcare |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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