Correlation Between Old Westbury and Gmo Benchmark-free

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

By analyzing existing cross correlation between Old Westbury Large and Gmo Benchmark Free Allocation, you can compare the effects of market volatilities on Old Westbury and Gmo Benchmark-free 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 Gmo Benchmark-free. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Gmo Benchmark-free.

Diversification Opportunities for Old Westbury and Gmo Benchmark-free

-0.41

Correlation Coefficient

Old Westbury  Gmo Benchmark-free

Very good diversification

The 3 months correlation between Old and Gmo is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Large and Gmo Benchmark Free Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gmo Benchmark Free 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 Large are associated (or correlated) with Gmo Benchmark-free. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gmo Benchmark Free has no effect on the direction of Old Westbury i.e., Old Westbury and Gmo Benchmark-free go up and down completely randomly.

Pair Corralation between Old Westbury and Gmo Benchmark-free

Assuming the 90 days horizon Old Westbury Large is expected to generate 1.4 times more return on investment than Gmo Benchmark-free. However, Old Westbury is 1.4 times more volatile than Gmo Benchmark Free Allocation. It trades about 0.18 of its potential returns per unit of risk. Gmo Benchmark Free Allocation is currently generating about -0.06 per unit of risk. If you would invest  1,999  in Old Westbury Large on September 4, 2024 and sell it today you would earn a total of  151.00  from holding Old Westbury Large or generate 7.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Old Westbury Large  vs.  Gmo Benchmark Free Allocation

Old Westbury Large

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Old Westbury Large are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Old Westbury may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Gmo Benchmark Free

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Old Westbury and Gmo Benchmark-free

The main advantage of trading using opposite Old Westbury and Gmo Benchmark-free positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Gmo Benchmark-free 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 Gmo Benchmark-free will offset losses from the drop in Gmo Benchmark-free's long position.

The idea behind Old Westbury Large and Gmo Benchmark Free Allocation 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.