Correlation Between Old Westbury and Scout E

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

By analyzing existing cross correlation between Old Westbury Fixed and Scout E Bond, you can compare the effects of market volatilities on Old Westbury and Scout E 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 Scout E. Check out your portfolio center. Please also check ongoing floating volatility patterns of Old Westbury and Scout E.

Diversification Opportunities for Old Westbury and Scout E

0.96

Correlation Coefficient

Old Westbury  Scout E

Almost no diversification

The 3 months correlation between Old and Scout is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Fixed and Scout E Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scout E Bond 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 Fixed are associated (or correlated) with Scout E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scout E Bond has no effect on the direction of Old Westbury i.e., Old Westbury and Scout E go up and down completely randomly.

Pair Corralation between Old Westbury and Scout E

Assuming the 90 days horizon Old Westbury is expected to generate 1.31 times less return on investment than Scout E. But when comparing it to its historical volatility, Old Westbury Fixed is 1.31 times less risky than Scout E. It trades about 0.19 of its potential returns per unit of risk. Scout E Bond is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  1,063  in Scout E Bond on July 4, 2025 and sell it today you would earn a total of  32.00  from holding Scout E Bond or generate 3.01% return on investment over 90 days.

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

Old Westbury Fixed  vs.  Scout E Bond

Old Westbury Fixed

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Old Westbury Fixed are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Old Westbury is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Scout E Bond

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Scout E Bond are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Scout E 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 Scout E

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

The idea behind Old Westbury Fixed and Scout E Bond 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.