Correlation Between Moderate Strategy and Old Westbury

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

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

Diversification Opportunities for Moderate Strategy and Old Westbury

0.56

Correlation Coefficient

Moderate Strategy  Old Westbury

Very weak diversification

The 3 months correlation between Moderate and Old is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Moderate Strategy Fund and Old Westbury California in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury California and Moderate Strategy 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 Moderate Strategy Fund 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 California has no effect on the direction of Moderate Strategy i.e., Moderate Strategy and Old Westbury go up and down completely randomly.

Pair Corralation between Moderate Strategy and Old Westbury

Assuming the 90 days horizon Moderate Strategy Fund is expected to generate 3.81 times more return on investment than Old Westbury. However, Moderate Strategy is 3.81 times more volatile than Old Westbury California. It trades about 0.25 of its potential returns per unit of risk. Old Westbury California is currently generating about 0.25 per unit of risk. If you would invest  896.00  in Moderate Strategy Fund on April 29, 2025 and sell it today you would earn a total of  48.00  from holding Moderate Strategy Fund or generate 5.36% return on investment over 90 days.

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

Moderate Strategy Fund  vs.  Old Westbury California

Moderate Strategy

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Moderate Strategy Fund are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental indicators, Moderate Strategy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Old Westbury California

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Old Westbury California are ranked lower than 19 (%) 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.

Pair Trading with Moderate Strategy and Old Westbury

The main advantage of trading using opposite Moderate Strategy and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Moderate Strategy 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 Moderate Strategy Fund and Old Westbury California 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.

Check out your portfolio center.

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.