Correlation Between Old Westbury and Vulcan Value

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

Diversification Opportunities for Old Westbury and Vulcan Value

0.88

Correlation Coefficient

Old Westbury  Vulcan Value

Very poor diversification

The 3 months correlation between Old and Vulcan is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Old Westbury Large and Vulcan Value Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vulcan Value Partners 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 Vulcan Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vulcan Value Partners has no effect on the direction of Old Westbury i.e., Old Westbury and Vulcan Value go up and down completely randomly.

Pair Corralation between Old Westbury and Vulcan Value

Assuming the 90 days horizon Old Westbury Large is expected to generate 0.59 times more return on investment than Vulcan Value. However, Old Westbury Large is 1.7 times less risky than Vulcan Value. It trades about 0.23 of its potential returns per unit of risk. Vulcan Value Partners is currently generating about 0.1 per unit of risk. If you would invest  2,053  in Old Westbury Large on May 16, 2025 and sell it today you would earn a total of  158.00  from holding Old Westbury Large or generate 7.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

Old Westbury Large  vs.  Vulcan Value Partners

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 18 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Old Westbury may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Vulcan Value Partners

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Vulcan Value Partners are ranked lower than 7 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong essential indicators, Vulcan Value 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 Vulcan Value

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

The idea behind Old Westbury Large and Vulcan Value Partners 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.