Correlation Between Old Westbury and Ab Ohio
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Ab Ohio 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 Ab Ohio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Westbury Small and Ab Ohio Portfolio, you can compare the effects of market volatilities on Old Westbury and Ab Ohio 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 Ab Ohio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Ab Ohio.
Diversification Opportunities for Old Westbury and Ab Ohio
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Old and AOHCX is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Small and Ab Ohio Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Ohio Portfolio 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 Small are associated (or correlated) with Ab Ohio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Ohio Portfolio has no effect on the direction of Old Westbury i.e., Old Westbury and Ab Ohio go up and down completely randomly.
Pair Corralation between Old Westbury and Ab Ohio
Assuming the 90 days horizon Old Westbury is expected to generate 1.31 times less return on investment than Ab Ohio. In addition to that, Old Westbury is 4.56 times more volatile than Ab Ohio Portfolio. It trades about 0.08 of its total potential returns per unit of risk. Ab Ohio Portfolio is currently generating about 0.45 per unit of volatility. If you would invest 933.00 in Ab Ohio Portfolio on September 13, 2024 and sell it today you would earn a total of 11.00 from holding Ab Ohio Portfolio or generate 1.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Westbury Small vs. Ab Ohio Portfolio
Performance |
| Timeline |
| Old Westbury Small |
| Ab Ohio Portfolio |
Old Westbury and Ab Ohio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Ab Ohio
The main advantage of trading using opposite Old Westbury and Ab Ohio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Ab Ohio 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 Ab Ohio will offset losses from the drop in Ab Ohio's long position.| Old Westbury vs. Old Westbury All | Old Westbury vs. Old Westbury California | Old Westbury vs. Old Westbury Credit | Old Westbury vs. Old Westbury Fixed |
| Ab Ohio vs. Aqr Small Cap | Ab Ohio vs. Pace Smallmedium Value | Ab Ohio vs. Old Westbury Small | Ab Ohio vs. Ab Small Cap |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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