Correlation Between Strategic Bond and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Strategic Bond and Old Westbury 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 Strategic Bond and Old Westbury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Bond Fund and Old Westbury Short Term, you can compare the effects of market volatilities on Strategic Bond and Old Westbury 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 Strategic Bond with a short position of Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Bond and Old Westbury.
Diversification Opportunities for Strategic Bond and Old Westbury
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Strategic and Old is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Bond Fund and Old Westbury Short Term in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Short and Strategic Bond 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 Strategic Bond Fund are associated (or correlated) with Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury Short has no effect on the direction of Strategic Bond i.e., Strategic Bond and Old Westbury go up and down completely randomly.
Pair Corralation between Strategic Bond and Old Westbury
Assuming the 90 days horizon Strategic Bond Fund is expected to generate 2.83 times more return on investment than Old Westbury. However, Strategic Bond is 2.83 times more volatile than Old Westbury Short Term. It trades about 0.12 of its potential returns per unit of risk. Old Westbury Short Term is currently generating about 0.19 per unit of risk. If you would invest 883.00 in Strategic Bond Fund on November 1, 2024 and sell it today you would earn a total of 6.00 from holding Strategic Bond Fund or generate 0.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Bond Fund vs. Old Westbury Short Term
Performance |
| Timeline |
| Strategic Bond |
| Old Westbury Short |
Strategic Bond and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Bond and Old Westbury
The main advantage of trading using opposite Strategic Bond and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Bond position performs unexpectedly, Old Westbury 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 Old Westbury will offset losses from the drop in Old Westbury's long position.| Strategic Bond vs. Blackrock Global Longshort | Strategic Bond vs. Angel Oak Ultrashort | Strategic Bond vs. Cmg Ultra Short | Strategic Bond vs. Alpine Ultra Short |
| Old Westbury vs. Millerhoward High Income | Old Westbury vs. Gmo High Yield | Old Westbury vs. Artisan High Income | Old Westbury vs. Prudential High Yield |
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 CEOs Directory module to screen CEOs from public companies around the world.
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