Correlation Between Guidemark(r) Core and Old Westbury

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

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

Diversification Opportunities for Guidemark(r) Core and Old Westbury

0.97

Correlation Coefficient

Guidemark(r) Core  Old Westbury

Almost no diversification

The 3 months correlation between Guidemark(r) and Old is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Guidemark E Fixed 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 Guidemark(r) Core 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 Guidemark E Fixed 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 Guidemark(r) Core i.e., Guidemark(r) Core and Old Westbury go up and down completely randomly.

Pair Corralation between Guidemark(r) Core and Old Westbury

Assuming the 90 days horizon Guidemark(r) Core is expected to generate 1.42 times less return on investment than Old Westbury. In addition to that, Guidemark(r) Core is 1.27 times more volatile than Old Westbury Fixed. It trades about 0.09 of its total potential returns per unit of risk. Old Westbury Fixed is currently generating about 0.16 per unit of volatility. If you would invest  988.00  in Old Westbury Fixed on December 26, 2024 and sell it today you would earn a total of  21.00  from holding Old Westbury Fixed or generate 2.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Guidemark E Fixed  vs.  Old Westbury Fixed

Guidemark E Fixed

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Guidemark E Fixed are ranked lower than 6 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Guidemark(r) Core 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

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Old Westbury Fixed are ranked lower than 12 (%) of all funds and portfolios of funds over the last 90 days. 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 Guidemark(r) Core and Old Westbury

The main advantage of trading using opposite Guidemark(r) Core and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidemark(r) Core 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 Guidemark E Fixed 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.