Correlation Between Old Westbury and Us Government
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Us 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 Us 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 Us Government Securities, you can compare the effects of market volatilities on Old Westbury and Us 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 Us Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Us Government.
Diversification Opportunities for Old Westbury and Us Government
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Old and UGSDX is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Municipal and Us Government Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Us Government Securities 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 Us Government. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Us Government Securities has no effect on the direction of Old Westbury i.e., Old Westbury and Us Government go up and down completely randomly.
Pair Corralation between Old Westbury and Us Government
Assuming the 90 days horizon Old Westbury is expected to generate 1.96 times less return on investment than Us Government. In addition to that, Old Westbury is 1.42 times more volatile than Us Government Securities. It trades about 0.04 of its total potential returns per unit of risk. Us Government Securities is currently generating about 0.12 per unit of volatility. If you would invest 180.00 in Us Government Securities on April 15, 2025 and sell it today you would earn a total of 15.00 from holding Us Government Securities or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Old Westbury Municipal vs. Us Government Securities
Performance |
| Timeline |
| Old Westbury Municipal |
| Us Government Securities |
Old Westbury and Us Government Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Old Westbury and Us Government
The main advantage of trading using opposite Old Westbury and Us Government positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Us 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 Us Government will offset losses from the drop in Us Government's long position.| Old Westbury vs. Northern Small Cap | Old Westbury vs. Boston Partners Small | Old Westbury vs. Applied Finance Explorer | Old Westbury vs. Lsv Small Cap |
| Us Government vs. Morningstar Unconstrained Allocation | Us Government vs. Old Westbury Large | Us Government vs. Transamerica Asset Allocation | Us Government vs. Growth Allocation Fund |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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