Correlation Between Old Westbury and State Farm
Can any of the company-specific risk be diversified away by investing in both Old Westbury and State Farm 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 State Farm 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 State Farm International, you can compare the effects of market volatilities on Old Westbury and State Farm 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 State Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and State Farm.
Diversification Opportunities for Old Westbury and State Farm
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Old and State is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Large and State Farm International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Farm International 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 State Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Farm International has no effect on the direction of Old Westbury i.e., Old Westbury and State Farm go up and down completely randomly.
Pair Corralation between Old Westbury and State Farm
Assuming the 90 days horizon Old Westbury Large is expected to under-perform the State Farm. In addition to that, Old Westbury is 4.2 times more volatile than State Farm International. It trades about -0.13 of its total potential returns per unit of risk. State Farm International is currently generating about -0.08 per unit of volatility. If you would invest 1,653 in State Farm International on December 5, 2024 and sell it today you would lose (19.00) from holding State Farm International or give up 1.15% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 98.33% |
Values | Daily Returns |
Old Westbury Large vs. State Farm International
Performance |
Timeline |
Old Westbury Large |
State Farm International |
Old Westbury and State Farm Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Old Westbury and State Farm
The main advantage of trading using opposite Old Westbury and State Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, State Farm 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 State Farm will offset losses from the drop in State Farm's long position.Old Westbury vs. Mfs Diversified Income | Old Westbury vs. Blackrock Conservative Prprdptfinstttnl | Old Westbury vs. Global Diversified Income | Old Westbury vs. Federated Hermes Conservative |
State Farm vs. Neuberger Berman Real | State Farm vs. Nexpoint Real Estate | State Farm vs. Rreef Property Trust | State Farm vs. Forum Real Estate |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |