Correlation Between Old Westbury and Amg Southernsun
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Amg Southernsun 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 Amg Southernsun 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 Amg Southernsun Equity, you can compare the effects of market volatilities on Old Westbury and Amg Southernsun 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 Amg Southernsun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Amg Southernsun.
Diversification Opportunities for Old Westbury and Amg Southernsun
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Old and Amg is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Short Term and Amg Southernsun Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Southernsun 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 Amg Southernsun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Southernsun Equity has no effect on the direction of Old Westbury i.e., Old Westbury and Amg Southernsun go up and down completely randomly.
Pair Corralation between Old Westbury and Amg Southernsun
Assuming the 90 days horizon Old Westbury is expected to generate 33.36 times less return on investment than Amg Southernsun. But when comparing it to its historical volatility, Old Westbury Short Term is 10.02 times less risky than Amg Southernsun. It trades about 0.08 of its potential returns per unit of risk. Amg Southernsun Equity is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 1,470 in Amg Southernsun Equity on August 30, 2024 and sell it today you would earn a total of 98.00 from holding Amg Southernsun Equity or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Westbury Short Term vs. Amg Southernsun Equity
Performance |
| Timeline |
| Old Westbury Short |
| Amg Southernsun Equity |
Old Westbury and Amg Southernsun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Amg Southernsun
The main advantage of trading using opposite Old Westbury and Amg Southernsun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Amg Southernsun 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 Amg Southernsun will offset losses from the drop in Amg Southernsun's long position.| Old Westbury vs. Ab Bond Inflation | Old Westbury vs. Arrow Managed Futures | Old Westbury vs. Ab Bond Inflation | Old Westbury vs. Oklahoma College Savings |
| Amg Southernsun vs. Ab Select Longshort | Amg Southernsun vs. Touchstone Ultra Short | Amg Southernsun vs. Franklin Federal Limited Term | Amg Southernsun vs. Old Westbury Short Term |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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