Correlation Between Old Westbury and Largecap Value
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Largecap Value 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 Old Westbury and Largecap Value into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Westbury Fixed and Largecap Value Fund, you can compare the effects of market volatilities on Old Westbury and Largecap Value 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 Old Westbury with a short position of Largecap Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Largecap Value.
Diversification Opportunities for Old Westbury and Largecap Value
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Old and Largecap is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Fixed and Largecap Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Largecap Value and Old Westbury 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 Old Westbury Fixed are associated (or correlated) with Largecap Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Largecap Value has no effect on the direction of Old Westbury i.e., Old Westbury and Largecap Value go up and down completely randomly.
Pair Corralation between Old Westbury and Largecap Value
Assuming the 90 days horizon Old Westbury is expected to generate 5.7 times less return on investment than Largecap Value. But when comparing it to its historical volatility, Old Westbury Fixed is 3.93 times less risky than Largecap Value. It trades about 0.15 of its potential returns per unit of risk. Largecap Value Fund is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,972 in Largecap Value Fund on June 6, 2025 and sell it today you would earn a total of 55.00 from holding Largecap Value Fund or generate 2.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Westbury Fixed vs. Largecap Value Fund
Performance |
| Timeline |
| Old Westbury Fixed |
| Largecap Value |
Old Westbury and Largecap Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Largecap Value
The main advantage of trading using opposite Old Westbury and Largecap Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Largecap Value 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 Largecap Value will offset losses from the drop in Largecap Value's long position.| Old Westbury vs. Queens Road Small | Old Westbury vs. Boston Partners Small | Old Westbury vs. Applied Finance Explorer | Old Westbury vs. Ultrasmall Cap Profund Ultrasmall Cap |
| Largecap Value vs. The Hartford Floating | Largecap Value vs. T Rowe Price | Largecap Value vs. Artisan High Income | Largecap Value vs. Ab Global Risk |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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