Correlation Between Guidemark(r) Large and Teton Westwood
Can any of the company-specific risk be diversified away by investing in both Guidemark(r) 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 Guidemark(r) 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 Guidemark Large Cap and Teton Westwood Small, you can compare the effects of market volatilities on Guidemark(r) 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 Guidemark(r) Large with a short position of Teton Westwood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidemark(r) Large and Teton Westwood.
Diversification Opportunities for Guidemark(r) Large and Teton Westwood
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Guidemark(r) and Teton is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Guidemark Large Cap and Teton Westwood Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teton Westwood Small and Guidemark(r) 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 Guidemark 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 Small has no effect on the direction of Guidemark(r) Large i.e., Guidemark(r) Large and Teton Westwood go up and down completely randomly.
Pair Corralation between Guidemark(r) Large and Teton Westwood
Assuming the 90 days horizon Guidemark Large Cap is expected to generate 0.85 times more return on investment than Teton Westwood. However, Guidemark Large Cap is 1.18 times less risky than Teton Westwood. It trades about 0.12 of its potential returns per unit of risk. Teton Westwood Small is currently generating about 0.01 per unit of risk. If you would invest 3,316 in Guidemark Large Cap on November 4, 2024 and sell it today you would earn a total of 62.00 from holding Guidemark Large Cap or generate 1.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guidemark Large Cap vs. Teton Westwood Small
Performance |
| Timeline |
| Guidemark Large Cap |
| Teton Westwood Small |
Guidemark(r) Large and Teton Westwood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guidemark(r) Large and Teton Westwood
The main advantage of trading using opposite Guidemark(r) Large and Teton Westwood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidemark(r) 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.| Guidemark(r) Large vs. Strategic Advisers Income | Guidemark(r) Large vs. Msift High Yield | Guidemark(r) Large vs. Lord Abbett Short | Guidemark(r) Large vs. Buffalo High Yield |
| Teton Westwood vs. Victory Cemp Market | Teton Westwood vs. Kinetics Market Opportunities | Teton Westwood vs. Vanguard Developed Markets | Teton Westwood vs. Barings Active Short |
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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