Correlation Between Old Westbury and Gabelli Equity
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Gabelli 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 Gabelli Equity 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 The Gabelli Equity, you can compare the effects of market volatilities on Old Westbury and Gabelli 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 Gabelli Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Gabelli Equity.
Diversification Opportunities for Old Westbury and Gabelli Equity
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Old and Gabelli is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Small and The Gabelli Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli 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 Small are associated (or correlated) with Gabelli Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Equity has no effect on the direction of Old Westbury i.e., Old Westbury and Gabelli Equity go up and down completely randomly.
Pair Corralation between Old Westbury and Gabelli Equity
Assuming the 90 days horizon Old Westbury Small is expected to generate 1.07 times more return on investment than Gabelli Equity. However, Old Westbury is 1.07 times more volatile than The Gabelli Equity. It trades about 0.05 of its potential returns per unit of risk. The Gabelli Equity is currently generating about 0.05 per unit of risk. If you would invest 1,512 in Old Westbury Small on September 12, 2024 and sell it today you would earn a total of 228.00 from holding Old Westbury Small or generate 15.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Westbury Small vs. The Gabelli Equity
Performance |
| Timeline |
| Old Westbury Small |
| Gabelli Equity |
Old Westbury and Gabelli Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Gabelli Equity
The main advantage of trading using opposite Old Westbury and Gabelli Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Gabelli 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 Gabelli Equity will offset losses from the drop in Gabelli Equity's long position.| Old Westbury vs. Msift High Yield | Old Westbury vs. T Rowe Price | Old Westbury vs. Payden High Income | Old Westbury vs. Siit High Yield |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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