Correlation Between Swan Defined and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Swan Defined 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 Swan Defined and Old Westbury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Swan Defined Risk and Old Westbury Municipal, you can compare the effects of market volatilities on Swan Defined 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 Swan Defined with a short position of Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Swan Defined and Old Westbury.
Diversification Opportunities for Swan Defined and Old Westbury
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Swan and Old is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Swan Defined Risk and Old Westbury Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Municipal and Swan Defined 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 Swan Defined Risk 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 Municipal has no effect on the direction of Swan Defined i.e., Swan Defined and Old Westbury go up and down completely randomly.
Pair Corralation between Swan Defined and Old Westbury
Assuming the 90 days horizon Swan Defined Risk is expected to generate 6.06 times more return on investment than Old Westbury. However, Swan Defined is 6.06 times more volatile than Old Westbury Municipal. It trades about 0.05 of its potential returns per unit of risk. Old Westbury Municipal is currently generating about 0.07 per unit of risk. If you would invest 1,343 in Swan Defined Risk on September 12, 2024 and sell it today you would earn a total of 241.00 from holding Swan Defined Risk or generate 17.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Swan Defined Risk vs. Old Westbury Municipal
Performance |
| Timeline |
| Swan Defined Risk |
| Old Westbury Municipal |
Swan Defined and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Swan Defined and Old Westbury
The main advantage of trading using opposite Swan Defined and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Swan Defined 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.| Swan Defined vs. California High Yield Municipal | Swan Defined vs. Oklahoma Municipal Fund | Swan Defined vs. Franklin High Yield | Swan Defined vs. Ishares Municipal Bond |
| Old Westbury vs. Royce Global Financial | Old Westbury vs. Gabelli Global Financial | Old Westbury vs. Mesirow Financial Small | Old Westbury vs. Financials Ultrasector Profund |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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