Correlation Between Gabelli Equity and Teton Westwood
Can any of the company-specific risk be diversified away by investing in both Gabelli Equity 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 Gabelli Equity and Teton Westwood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gabelli Equity and Teton Westwood Mighty, you can compare the effects of market volatilities on Gabelli Equity 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 Gabelli Equity with a short position of Teton Westwood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Equity and Teton Westwood.
Diversification Opportunities for Gabelli Equity and Teton Westwood
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Gabelli and Teton is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Equity and Teton Westwood Mighty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teton Westwood Mighty and Gabelli Equity 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 The Gabelli Equity 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 Mighty has no effect on the direction of Gabelli Equity i.e., Gabelli Equity and Teton Westwood go up and down completely randomly.
Pair Corralation between Gabelli Equity and Teton Westwood
Assuming the 90 days horizon The Gabelli Equity is expected to generate 0.4 times more return on investment than Teton Westwood. However, The Gabelli Equity is 2.5 times less risky than Teton Westwood. It trades about 0.07 of its potential returns per unit of risk. Teton Westwood Mighty is currently generating about -0.02 per unit of risk. If you would invest 580.00 in The Gabelli Equity on September 14, 2024 and sell it today you would earn a total of 71.00 from holding The Gabelli Equity or generate 12.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Gabelli Equity vs. Teton Westwood Mighty
Performance |
| Timeline |
| Gabelli Equity |
| Teton Westwood Mighty |
Gabelli Equity and Teton Westwood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Equity and Teton Westwood
The main advantage of trading using opposite Gabelli Equity and Teton Westwood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli Equity 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.| Gabelli Equity vs. The Gabelli Small | Gabelli Equity vs. The Gabelli Asset | Gabelli Equity vs. Wasatch Large Cap | Gabelli Equity vs. Tcw Relative Value |
| Teton Westwood vs. The Gabelli Small | Teton Westwood vs. Teton Westwood Equity | Teton Westwood vs. Teton Westwood Small | Teton Westwood vs. The Gabelli Equity |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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