Correlation Between Old Westbury and Tax-exempt High
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Tax-exempt High 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 Tax-exempt High 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 Tax Exempt High Yield, you can compare the effects of market volatilities on Old Westbury and Tax-exempt High 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 Tax-exempt High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Tax-exempt High.
Diversification Opportunities for Old Westbury and Tax-exempt High
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Old and Tax-exempt is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Municipal and Tax Exempt High Yield in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tax Exempt High 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 Tax-exempt High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tax Exempt High has no effect on the direction of Old Westbury i.e., Old Westbury and Tax-exempt High go up and down completely randomly.
Pair Corralation between Old Westbury and Tax-exempt High
Assuming the 90 days horizon Old Westbury Municipal is expected to generate 0.42 times more return on investment than Tax-exempt High. However, Old Westbury Municipal is 2.41 times less risky than Tax-exempt High. It trades about 0.41 of its potential returns per unit of risk. Tax Exempt High Yield is currently generating about 0.06 per unit of risk. If you would invest 1,130 in Old Westbury Municipal on June 8, 2025 and sell it today you would earn a total of 26.00 from holding Old Westbury Municipal or generate 2.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Westbury Municipal vs. Tax Exempt High Yield
Performance |
| Timeline |
| Old Westbury Municipal |
| Tax Exempt High |
Old Westbury and Tax-exempt High Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Tax-exempt High
The main advantage of trading using opposite Old Westbury and Tax-exempt High positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Tax-exempt High 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 Tax-exempt High will offset losses from the drop in Tax-exempt High's long position.| Old Westbury vs. Aqr Large Cap | Old Westbury vs. Calvert Large Cap | Old Westbury vs. Qs Large Cap | Old Westbury vs. Dana Large Cap |
| Tax-exempt High vs. International Developed Markets | Tax-exempt High vs. Global Real Estate | Tax-exempt High vs. Global Real Estate | Tax-exempt High vs. Global Real Estate |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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