Correlation Between International Investors and Old Westbury

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

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

Diversification Opportunities for International Investors and Old Westbury

-0.07

Correlation Coefficient

International Investors  Old Westbury

Good diversification

The 3 months correlation between International and Old is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding International Investors Gold and Old Westbury All in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury All and International Investors 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 International Investors Gold 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 All has no effect on the direction of International Investors i.e., International Investors and Old Westbury go up and down completely randomly.

Pair Corralation between International Investors and Old Westbury

Assuming the 90 days horizon International Investors Gold is expected to generate 1.13 times more return on investment than Old Westbury. However, International Investors is 1.13 times more volatile than Old Westbury All. It trades about 0.1 of its potential returns per unit of risk. Old Westbury All is currently generating about -0.13 per unit of risk. If you would invest  1,114  in International Investors Gold on December 1, 2024 and sell it today you would earn a total of  104.00  from holding International Investors Gold or generate 9.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

International Investors Gold  vs.  Old Westbury All

International Investors

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in International Investors Gold are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, International Investors may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Old Westbury All

Risk-Adjusted Performance

Very Weak

Over the last 90 days Old Westbury All has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with International Investors and Old Westbury

The main advantage of trading using opposite International Investors and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Investors 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 International Investors Gold and Old Westbury All 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.