Correlation Between Old Westbury and Federated Government
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Federated Government 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 Federated Government into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Westbury Municipal and Federated Government Ultrashort, you can compare the effects of market volatilities on Old Westbury and Federated Government 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 Federated Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Federated Government.
Diversification Opportunities for Old Westbury and Federated Government
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Old and Federated is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Municipal and Federated Government Ultrashor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Government 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 Municipal are associated (or correlated) with Federated Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Government has no effect on the direction of Old Westbury i.e., Old Westbury and Federated Government go up and down completely randomly.
Pair Corralation between Old Westbury and Federated Government
Assuming the 90 days horizon Old Westbury Municipal is expected to generate 0.93 times more return on investment than Federated Government. However, Old Westbury Municipal is 1.08 times less risky than Federated Government. It trades about 0.34 of its potential returns per unit of risk. Federated Government Ultrashort is currently generating about 0.26 per unit of risk. If you would invest 1,128 in Old Westbury Municipal on May 28, 2025 and sell it today you would earn a total of 20.00 from holding Old Westbury Municipal or generate 1.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Westbury Municipal vs. Federated Government Ultrashor
Performance |
| Timeline |
| Old Westbury Municipal |
| Federated Government |
Old Westbury and Federated Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Federated Government
The main advantage of trading using opposite Old Westbury and Federated Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Federated Government 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 Federated Government will offset losses from the drop in Federated Government's long position.| Old Westbury vs. Dunham Porategovernment Bond | Old Westbury vs. Us Government Securities | Old Westbury vs. Intermediate Government Bond | Old Westbury vs. Us Government Securities |
| Federated Government vs. Calamos Growth Fund | Federated Government vs. Qs Growth Fund | Federated Government vs. Chase Growth Fund | Federated Government vs. T Rowe Price |
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.
Other Complementary Tools
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |