Correlation Between Commodities Strategy and Old Westbury

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

Diversification Opportunities for Commodities Strategy and Old Westbury

0.72

Correlation Coefficient

Commodities Strategy  Old Westbury

Poor diversification

The 3 months correlation between Commodities and Old is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Commodities Strategy Fund and Old Westbury Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Small and Commodities 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 Commodities 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 Small has no effect on the direction of Commodities Strategy i.e., Commodities Strategy and Old Westbury go up and down completely randomly.

Pair Corralation between Commodities Strategy and Old Westbury

Assuming the 90 days horizon Commodities Strategy Fund is expected to generate 1.86 times more return on investment than Old Westbury. However, Commodities Strategy is 1.86 times more volatile than Old Westbury Small. It trades about 0.14 of its potential returns per unit of risk. Old Westbury Small is currently generating about 0.2 per unit of risk. If you would invest  14,233  in Commodities Strategy Fund on May 4, 2025 and sell it today you would earn a total of  1,372  from holding Commodities Strategy Fund or generate 9.64% return on investment over 90 days.

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

Commodities Strategy Fund  vs.  Old Westbury Small

Commodities Strategy

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Commodities Strategy Fund are ranked lower than 10 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Commodities Strategy may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Old Westbury Small

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Old Westbury Small are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak primary indicators, Old Westbury may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Commodities Strategy and Old Westbury

The main advantage of trading using opposite Commodities Strategy and Old Westbury positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Commodities 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 Commodities Strategy Fund and Old Westbury Small 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.