Correlation Between Old Westbury and Dfa Short

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

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

Diversification Opportunities for Old Westbury and Dfa Short

0.94

Correlation Coefficient

Old Westbury  Dfa Short

Almost no diversification

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

Pair Corralation between Old Westbury and Dfa Short

Assuming the 90 days horizon Old Westbury Large is expected to generate 8.16 times more return on investment than Dfa Short. However, Old Westbury is 8.16 times more volatile than Dfa Short Duration Real. It trades about 0.22 of its potential returns per unit of risk. Dfa Short Duration Real is currently generating about 0.35 per unit of risk. If you would invest  2,150  in Old Westbury Large on July 4, 2025 and sell it today you would earn a total of  136.00  from holding Old Westbury Large or generate 6.33% 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 Large  vs.  Dfa Short Duration Real

Old Westbury Large

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Old Westbury Large are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Old Westbury is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Dfa Short Duration

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Dfa Short Duration Real are ranked lower than 27 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Dfa 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 Dfa Short

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

The idea behind Old Westbury Large and Dfa Short Duration Real 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.