Correlation Between Old Westbury and Chartwell Short

Can any of the company-specific risk be diversified away by investing in both Old Westbury and Chartwell Short 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 Chartwell Short 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 Chartwell Short Duration, you can compare the effects of market volatilities on Old Westbury and Chartwell Short 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 Chartwell Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Chartwell Short.

Diversification Opportunities for Old Westbury and Chartwell Short

0.94

Correlation Coefficient

Old Westbury  Chartwell Short

Almost no diversification

The 3 months correlation between Old and CHARTWELL is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Short Term and Chartwell Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chartwell Short Duration 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 Chartwell Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chartwell Short Duration has no effect on the direction of Old Westbury i.e., Old Westbury and Chartwell Short go up and down completely randomly.

Pair Corralation between Old Westbury and Chartwell Short

Assuming the 90 days horizon Old Westbury is expected to generate 1.43 times less return on investment than Chartwell Short. But when comparing it to its historical volatility, Old Westbury Short Term is 1.25 times less risky than Chartwell Short. It trades about 0.18 of its potential returns per unit of risk. Chartwell Short Duration is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  832.00  in Chartwell Short Duration on November 29, 2024 and sell it today you would earn a total of  125.00  from holding Chartwell Short Duration or generate 15.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	50.3%
Values	Daily Returns

Old Westbury Short Term  vs.  Chartwell Short Duration

Old Westbury Short

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Old Westbury Short Term are ranked lower than 15 (%) 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.

Chartwell Short Duration

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Chartwell Short Duration are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Chartwell Short 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 Chartwell Short

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

The idea behind Old Westbury Short Term and Chartwell Short Duration 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.