Correlation Between Sp Smallcap and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Sp Smallcap 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 Sp Smallcap and Old Westbury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sp Smallcap 600 and Old Westbury Small, you can compare the effects of market volatilities on Sp Smallcap 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 Sp Smallcap with a short position of Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sp Smallcap and Old Westbury.
Diversification Opportunities for Sp Smallcap and Old Westbury
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between RYSVX and Old is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Sp Smallcap 600 and Old Westbury Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Small and Sp Smallcap 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 Sp Smallcap 600 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 Small has no effect on the direction of Sp Smallcap i.e., Sp Smallcap and Old Westbury go up and down completely randomly.
Pair Corralation between Sp Smallcap and Old Westbury
Assuming the 90 days horizon Sp Smallcap 600 is expected to generate 1.83 times more return on investment than Old Westbury. However, Sp Smallcap is 1.83 times more volatile than Old Westbury Small. It trades about 0.05 of its potential returns per unit of risk. Old Westbury Small is currently generating about 0.06 per unit of risk. If you would invest 16,347 in Sp Smallcap 600 on September 14, 2024 and sell it today you would earn a total of 5,751 from holding Sp Smallcap 600 or generate 35.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sp Smallcap 600 vs. Old Westbury Small
Performance |
| Timeline |
| Sp Smallcap 600 |
| Old Westbury Small |
Sp Smallcap and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sp Smallcap and Old Westbury
The main advantage of trading using opposite Sp Smallcap and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sp Smallcap 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.| Sp Smallcap vs. Columbia Moderate Growth | Sp Smallcap vs. Blackrock Moderate Prepared | Sp Smallcap vs. Jp Morgan Smartretirement | Sp Smallcap vs. Deutsche Multi Asset Moderate |
| Old Westbury vs. Rational Defensive Growth | Old Westbury vs. Smallcap Growth Fund | Old Westbury vs. Small Pany Growth | Old Westbury vs. Qs Moderate Growth |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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