Correlation Between Monteagle Enhanced and Old Westbury

Can any of the company-specific risk be diversified away by investing in both Monteagle Enhanced 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 Monteagle Enhanced and Old Westbury into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Monteagle Enhanced Equity and Old Westbury Fixed, you can compare the effects of market volatilities on Monteagle Enhanced 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 Monteagle Enhanced with a short position of Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Monteagle Enhanced and Old Westbury.

Diversification Opportunities for Monteagle Enhanced and Old Westbury

0.55

Correlation Coefficient

Monteagle Enhanced  Old Westbury

Very weak diversification

The 3 months correlation between Monteagle and Old is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Monteagle Enhanced Equity and Old Westbury Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Fixed and Monteagle Enhanced 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 Monteagle Enhanced Equity 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 Fixed has no effect on the direction of Monteagle Enhanced i.e., Monteagle Enhanced and Old Westbury go up and down completely randomly.

Pair Corralation between Monteagle Enhanced and Old Westbury

Assuming the 90 days horizon Monteagle Enhanced Equity is expected to generate 1.85 times more return on investment than Old Westbury. However, Monteagle Enhanced is 1.85 times more volatile than Old Westbury Fixed. It trades about 0.07 of its potential returns per unit of risk. Old Westbury Fixed is currently generating about 0.02 per unit of risk. If you would invest  829.00  in Monteagle Enhanced Equity on October 11, 2024 and sell it today you would earn a total of  176.00  from holding Monteagle Enhanced Equity or generate 21.23% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.39%
Values	Daily Returns

Monteagle Enhanced Equity  vs.  Old Westbury Fixed

Monteagle Enhanced Equity

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Monteagle Enhanced Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Monteagle Enhanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Old Westbury Fixed

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Old Westbury Fixed has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong forward indicators, Old Westbury is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Monteagle Enhanced and Old Westbury

The main advantage of trading using opposite Monteagle Enhanced and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Monteagle Enhanced 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.

The idea behind Monteagle Enhanced Equity and Old Westbury Fixed pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.