Correlation Between Old Westbury and Voya Bond
Can any of the company-specific risk be diversified away by investing in both Old Westbury and Voya Bond 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 Voya Bond into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Old Westbury Municipal and Voya Bond Index, you can compare the effects of market volatilities on Old Westbury and Voya Bond 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 Voya Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Voya Bond.
Diversification Opportunities for Old Westbury and Voya Bond
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Old and Voya is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Municipal and Voya Bond Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Bond Index 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 Municipal are associated (or correlated) with Voya Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Bond Index has no effect on the direction of Old Westbury i.e., Old Westbury and Voya Bond go up and down completely randomly.
Pair Corralation between Old Westbury and Voya Bond
Assuming the 90 days horizon Old Westbury Municipal is expected to under-perform the Voya Bond. But the mutual fund apears to be less risky and, when comparing its historical volatility, Old Westbury Municipal is 2.07 times less risky than Voya Bond. The mutual fund trades about -0.01 of its potential returns per unit of risk. The Voya Bond Index is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 893.00 in Voya Bond Index on September 24, 2024 and sell it today you would earn a total of 3.00 from holding Voya Bond Index or generate 0.34% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Old Westbury Municipal vs. Voya Bond Index
Performance |
Timeline |
Old Westbury Municipal |
Voya Bond Index |
Old Westbury and Voya Bond Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Old Westbury and Voya Bond
The main advantage of trading using opposite Old Westbury and Voya Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Voya Bond 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 Voya Bond will offset losses from the drop in Voya Bond's long position.Old Westbury vs. Franklin Growth Opportunities | Old Westbury vs. Tfa Alphagen Growth | Old Westbury vs. Rational Defensive Growth | Old Westbury vs. Artisan Small Cap |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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