Correlation Between Old Westbury and Ing Series

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

Diversification Opportunities for Old Westbury and Ing Series

OldIngDiversified AwayOldIngDiversified Away100%
0.19
  Correlation Coefficient

Average diversification

The 3 months correlation between Old and Ing is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Short Term and Ing Series Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ing Series Fund 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 Ing Series. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ing Series Fund has no effect on the direction of Old Westbury i.e., Old Westbury and Ing Series go up and down completely randomly.

Pair Corralation between Old Westbury and Ing Series

Assuming the 90 days horizon Old Westbury Short Term is expected to generate 0.13 times more return on investment than Ing Series. However, Old Westbury Short Term is 7.49 times less risky than Ing Series. It trades about -0.12 of its potential returns per unit of risk. Ing Series Fund is currently generating about -0.03 per unit of risk. If you would invest  1,020  in Old Westbury Short Term on September 23, 2024 and sell it today you would lose (12.00) from holding Old Westbury Short Term or give up 1.18% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Old Westbury Short Term  vs.  Ing Series Fund

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -20246
JavaScript chart by amCharts 3.21.15OWSBX AISBX
       Timeline  
Old Westbury Short 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Old Westbury Short Term 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.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec10.0810.110.1210.1410.1610.1810.210.22
Ing Series Fund 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ing Series Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental drivers, Ing Series is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec13.81414.214.414.614.81515.2

Old Westbury and Ing Series Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-0.0984-0.0727-0.0471-0.02140.001070.02340.04590.06830.09080.24 51015
JavaScript chart by amCharts 3.21.15OWSBX AISBX
       Returns  

Pair Trading with Old Westbury and Ing Series

The main advantage of trading using opposite Old Westbury and Ing Series positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Old Westbury position performs unexpectedly, Ing Series 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 Ing Series will offset losses from the drop in Ing Series' long position.
The idea behind Old Westbury Short Term and Ing Series Fund 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.

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