Correlation Between Old Westbury and Western Asset
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Western Asset 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 Western Asset 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 Western Asset California, you can compare the effects of market volatilities on Old Westbury and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Western Asset.
Diversification Opportunities for Old Westbury and Western Asset
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Old and Western is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Short Term and Western Asset California in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset California 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset California has no effect on the direction of Old Westbury i.e., Old Westbury and Western Asset go up and down completely randomly.
Pair Corralation between Old Westbury and Western Asset
Assuming the 90 days horizon Old Westbury Short Term is expected to generate 0.58 times more return on investment than Western Asset. However, Old Westbury Short Term is 1.73 times less risky than Western Asset. It trades about 0.18 of its potential returns per unit of risk. Western Asset California is currently generating about 0.09 per unit of risk. If you would invest 979.00 in Old Westbury Short Term on September 2, 2024 and sell it today you would earn a total of 39.00 from holding Old Westbury Short Term or generate 3.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 77.02% |
| Values | Daily Returns |
Old Westbury Short Term vs. Western Asset California
Performance |
| Timeline |
| Old Westbury Short |
| Western Asset California |
Old Westbury and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Western Asset
The main advantage of trading using opposite Old Westbury and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset'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 |
| Western Asset vs. Multi Manager High Yield | Western Asset vs. Msift High Yield | Western Asset vs. American Century High | Western Asset vs. Metropolitan West High |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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