Correlation Between Tfa Alphagen and Old Westbury

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

By analyzing existing cross correlation between Tfa Alphagen Growth and Old Westbury Municipal, you can compare the effects of market volatilities on Tfa Alphagen and Old Westbury 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 Tfa Alphagen with a short position of Old Westbury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tfa Alphagen and Old Westbury.

Diversification Opportunities for Tfa Alphagen and Old Westbury

-0.11

Correlation Coefficient

Tfa Alphagen  Old Westbury

Good diversification

The 3 months correlation between Tfa and Old is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Tfa Alphagen Growth and Old Westbury Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Municipal and Tfa Alphagen 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 Tfa Alphagen Growth are associated (or correlated) with Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury Municipal has no effect on the direction of Tfa Alphagen i.e., Tfa Alphagen and Old Westbury go up and down completely randomly.

Pair Corralation between Tfa Alphagen and Old Westbury

Assuming the 90 days horizon Tfa Alphagen Growth is expected to under-perform the Old Westbury. In addition to that, Tfa Alphagen is 5.95 times more volatile than Old Westbury Municipal. It trades about -0.05 of its total potential returns per unit of risk. Old Westbury Municipal is currently generating about -0.03 per unit of volatility. If you would invest  1,151  in Old Westbury Municipal on September 21, 2024 and sell it today you would lose (1.00) from holding Old Westbury Municipal or give up 0.09% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Tfa Alphagen Growth  vs.  Old Westbury Municipal

Tfa Alphagen Growth

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Tfa Alphagen Growth are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong technical and fundamental indicators, Tfa Alphagen is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Old Westbury Municipal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Old Westbury Municipal has generated negative risk-adjusted returns adding no value to fund investors. 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.

Pair Trading with Tfa Alphagen and Old Westbury

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

The idea behind Tfa Alphagen Growth and Old Westbury Municipal 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.