Correlation Between Columbia Select and Old Westbury
Can any of the company-specific risk be diversified away by investing in both Columbia Select 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 Columbia Select and Old Westbury into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Columbia Select Large Cap and Old Westbury Municipal, you can compare the effects of market volatilities on Columbia Select 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 Columbia Select with a short position of Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Columbia Select and Old Westbury.
Diversification Opportunities for Columbia Select and Old Westbury
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Columbia and Old is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Columbia Select Large Cap 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 Columbia Select 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 Columbia Select Large Cap 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 Columbia Select i.e., Columbia Select and Old Westbury go up and down completely randomly.
Pair Corralation between Columbia Select and Old Westbury
Assuming the 90 days horizon Columbia Select Large Cap is expected to generate 5.23 times more return on investment than Old Westbury. However, Columbia Select is 5.23 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 0.04 per unit of risk. If you would invest 3,444 in Columbia Select Large Cap on April 3, 2025 and sell it today you would earn a total of 463.00 from holding Columbia Select Large Cap or generate 13.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Columbia Select Large Cap vs. Old Westbury Municipal
Performance |
| Timeline |
| Columbia Select Large |
| Old Westbury Municipal |
Columbia Select and Old Westbury Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Columbia Select and Old Westbury
The main advantage of trading using opposite Columbia Select and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Columbia Select 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.| Columbia Select vs. Pax High Yield | Columbia Select vs. Gmo High Yield | Columbia Select vs. Federated High Yield | Columbia Select vs. High Yield Fund Investor |
| Old Westbury vs. Old Westbury All | Old Westbury vs. Old Westbury Credit | Old Westbury vs. Old Westbury Fixed | Old Westbury vs. Old Westbury Large |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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