Correlation Between Old Westbury and Columbia Marsico

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

By analyzing existing cross correlation between Old Westbury Short Term and Columbia Marsico Growth, you can compare the effects of market volatilities on Old Westbury and Columbia Marsico 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 Columbia Marsico. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Columbia Marsico.

Diversification Opportunities for Old Westbury and Columbia Marsico

0.32

Correlation Coefficient

Old Westbury  Columbia Marsico

Weak diversification

The 3 months correlation between Old and Columbia is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Short Term and Columbia Marsico Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Marsico Growth 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 Short Term are associated (or correlated) with Columbia Marsico. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Marsico Growth has no effect on the direction of Old Westbury i.e., Old Westbury and Columbia Marsico go up and down completely randomly.

Pair Corralation between Old Westbury and Columbia Marsico

Assuming the 90 days horizon Old Westbury Short Term is expected to generate 0.27 times more return on investment than Columbia Marsico. However, Old Westbury Short Term is 3.71 times less risky than Columbia Marsico. It trades about 0.24 of its potential returns per unit of risk. Columbia Marsico Growth is currently generating about 0.04 per unit of risk. If you would invest  1,000.00  in Old Westbury Short Term on December 29, 2024 and sell it today you would earn a total of  14.00  from holding Old Westbury Short Term or generate 1.4% return on investment over 90 days.

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

Old Westbury Short Term  vs.  Columbia Marsico Growth

Old Westbury Short

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Old Westbury Short Term are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Old Westbury is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Columbia Marsico Growth

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Columbia Marsico Growth are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Columbia Marsico 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 Columbia Marsico

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

The idea behind Old Westbury Short Term and Columbia Marsico Growth 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.