Correlation Between Ab Global and Teton Westwood
Can any of the company-specific risk be diversified away by investing in both Ab Global and Teton Westwood 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 Ab Global and Teton Westwood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Global Risk and Teton Westwood Equity, you can compare the effects of market volatilities on Ab Global and Teton Westwood 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 Ab Global with a short position of Teton Westwood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Global and Teton Westwood.
Diversification Opportunities for Ab Global and Teton Westwood
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between CABIX and Teton is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Ab Global Risk and Teton Westwood Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teton Westwood Equity and Ab Global 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 Ab Global Risk are associated (or correlated) with Teton Westwood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teton Westwood Equity has no effect on the direction of Ab Global i.e., Ab Global and Teton Westwood go up and down completely randomly.
Pair Corralation between Ab Global and Teton Westwood
Assuming the 90 days horizon Ab Global is expected to generate 2.03 times less return on investment than Teton Westwood. But when comparing it to its historical volatility, Ab Global Risk is 1.32 times less risky than Teton Westwood. It trades about 0.04 of its potential returns per unit of risk. Teton Westwood Equity is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,025 in Teton Westwood Equity on August 24, 2024 and sell it today you would earn a total of 225.00 from holding Teton Westwood Equity or generate 21.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Global Risk vs. Teton Westwood Equity
Performance |
| Timeline |
| Ab Global Risk |
| Teton Westwood Equity |
Ab Global and Teton Westwood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Global and Teton Westwood
The main advantage of trading using opposite Ab Global and Teton Westwood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Global position performs unexpectedly, Teton Westwood 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 Teton Westwood will offset losses from the drop in Teton Westwood's long position.| Ab Global vs. Volumetric Fund Volumetric | Ab Global vs. Semiconductor Ultrasector Profund | Ab Global vs. Western Asset Pennsylvania | Ab Global vs. Vanguard Strategic Small Cap |
| Teton Westwood vs. Ab Global Risk | Teton Westwood vs. Calvert High Yield | Teton Westwood vs. Siit High Yield | Teton Westwood vs. Metropolitan West High |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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