Correlation Between World Energy and Old Westbury
Can any of the company-specific risk be diversified away by investing in both World Energy 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 World Energy and Old Westbury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between World Energy Fund and Old Westbury Municipal, you can compare the effects of market volatilities on World Energy 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 World Energy with a short position of Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of World Energy and Old Westbury.
Diversification Opportunities for World Energy and Old Westbury
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between World and Old is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding World Energy Fund 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 World Energy 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 World Energy 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 Municipal has no effect on the direction of World Energy i.e., World Energy and Old Westbury go up and down completely randomly.
Pair Corralation between World Energy and Old Westbury
Assuming the 90 days horizon World Energy Fund is expected to generate 12.21 times more return on investment than Old Westbury. However, World Energy is 12.21 times more volatile than Old Westbury Municipal. It trades about 0.12 of its potential returns per unit of risk. Old Westbury Municipal is currently generating about 0.36 per unit of risk. If you would invest 1,570 in World Energy Fund on June 3, 2025 and sell it today you would earn a total of 117.00 from holding World Energy Fund or generate 7.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
World Energy Fund vs. Old Westbury Municipal
Performance |
| Timeline |
| World Energy |
| Old Westbury Municipal |
World Energy and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with World Energy and Old Westbury
The main advantage of trading using opposite World Energy and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if World Energy 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.| World Energy vs. Pgim Conservative Retirement | World Energy vs. Dimensional Retirement Income | World Energy vs. Sa Worldwide Moderate | World Energy vs. Sierra E Retirement |
| Old Westbury vs. Old Westbury All | Old Westbury vs. Old Westbury California | Old Westbury vs. Old Westbury Credit | Old Westbury vs. Old Westbury Fixed |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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