Correlation Between Gabelli Global and Teton Westwood
Can any of the company-specific risk be diversified away by investing in both Gabelli 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 Gabelli 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 Gabelli Global Financial and Teton Westwood Equity, you can compare the effects of market volatilities on Gabelli 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 Gabelli Global with a short position of Teton Westwood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gabelli Global and Teton Westwood.
Diversification Opportunities for Gabelli Global and Teton Westwood
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gabelli and Teton is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Gabelli Global Financial 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 Gabelli 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 Gabelli Global Financial 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 Gabelli Global i.e., Gabelli Global and Teton Westwood go up and down completely randomly.
Pair Corralation between Gabelli Global and Teton Westwood
Assuming the 90 days horizon Gabelli Global Financial is expected to generate 0.39 times more return on investment than Teton Westwood. However, Gabelli Global Financial is 2.57 times less risky than Teton Westwood. It trades about -0.14 of its potential returns per unit of risk. Teton Westwood Equity is currently generating about -0.25 per unit of risk. If you would invest 1,649 in Gabelli Global Financial on September 12, 2024 and sell it today you would lose (33.00) from holding Gabelli Global Financial or give up 2.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gabelli Global Financial vs. Teton Westwood Equity
Performance |
| Timeline |
| Gabelli Global Financial |
| Teton Westwood Equity |
Gabelli Global and Teton Westwood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gabelli Global and Teton Westwood
The main advantage of trading using opposite Gabelli Global and Teton Westwood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gabelli 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.| Gabelli Global vs. Heartland Value Plus | Gabelli Global vs. Mutual Of America | Gabelli Global vs. Ab Discovery Value | Gabelli Global vs. Boston Partners Small |
| Teton Westwood vs. Gabelli Global Financial | Teton Westwood vs. Angel Oak Financial | Teton Westwood vs. Royce Global Financial | Teton Westwood vs. Fidelity Advisor Financial |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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