Correlation Between Dana Large and Teton Westwood
Can any of the company-specific risk be diversified away by investing in both Dana Large 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 Dana Large and Teton Westwood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dana Large Cap and Teton Westwood Balanced, you can compare the effects of market volatilities on Dana Large 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 Dana Large with a short position of Teton Westwood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dana Large and Teton Westwood.
Diversification Opportunities for Dana Large and Teton Westwood
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dana and Teton is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Dana Large Cap and Teton Westwood Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teton Westwood Balanced and Dana Large 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 Dana Large Cap 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 Balanced has no effect on the direction of Dana Large i.e., Dana Large and Teton Westwood go up and down completely randomly.
Pair Corralation between Dana Large and Teton Westwood
Assuming the 90 days horizon Dana Large Cap is expected to generate 0.41 times more return on investment than Teton Westwood. However, Dana Large Cap is 2.46 times less risky than Teton Westwood. It trades about 0.02 of its potential returns per unit of risk. Teton Westwood Balanced is currently generating about -0.23 per unit of risk. If you would invest 2,696 in Dana Large Cap on September 12, 2024 and sell it today you would earn a total of 6.00 from holding Dana Large Cap or generate 0.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dana Large Cap vs. Teton Westwood Balanced
Performance |
| Timeline |
| Dana Large Cap |
| Teton Westwood Balanced |
Dana Large and Teton Westwood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dana Large and Teton Westwood
The main advantage of trading using opposite Dana Large and Teton Westwood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dana Large 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.| Dana Large vs. Intermediate Government Bond | Dana Large vs. Prudential Government Income | Dana Large vs. Us Government Securities | Dana Large vs. Virtus Seix Government |
| Teton Westwood vs. Lord Abbett Affiliated | Teton Westwood vs. Touchstone Large Cap | Teton Westwood vs. Dana Large Cap | Teton Westwood vs. Qs Large Cap |
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 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.
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