Correlation Between Scharf Global and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Scharf Global 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 Scharf Global and Old Westbury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scharf Global Opportunity and Old Westbury Short Term, you can compare the effects of market volatilities on Scharf Global 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 Scharf Global with a short position of Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scharf Global and Old Westbury.
Diversification Opportunities for Scharf Global and Old Westbury
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Scharf and Old is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Scharf Global Opportunity 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 Scharf Global 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 Scharf Global Opportunity 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 Scharf Global i.e., Scharf Global and Old Westbury go up and down completely randomly.
Pair Corralation between Scharf Global and Old Westbury
Assuming the 90 days horizon Scharf Global Opportunity is expected to under-perform the Old Westbury. In addition to that, Scharf Global is 4.02 times more volatile than Old Westbury Short Term. It trades about -0.12 of its total potential returns per unit of risk. Old Westbury Short Term is currently generating about 0.2 per unit of volatility. If you would invest 1,014 in Old Westbury Short Term on September 17, 2024 and sell it today you would earn a total of 4.00 from holding Old Westbury Short Term or generate 0.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scharf Global Opportunity vs. Old Westbury Short Term
Performance |
| Timeline |
| Scharf Global Opportunity |
| Old Westbury Short |
Scharf Global and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scharf Global and Old Westbury
The main advantage of trading using opposite Scharf Global and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scharf Global 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.| Scharf Global vs. Vanguard Health Care | Scharf Global vs. The Gabelli Healthcare | Scharf Global vs. Baillie Gifford Health | Scharf Global vs. Health Biotchnology Portfolio |
| Old Westbury vs. Balanced Fund Investor | Old Westbury vs. Falcon Focus Scv | Old Westbury vs. Leggmason Partners Institutional | Old Westbury vs. Scharf Global Opportunity |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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