Correlation Between NYSE Composite and Teton Westwood
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Teton Westwood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Teton Westwood Balanced, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Teton Westwood. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Teton Westwood.
Diversification Opportunities for NYSE Composite and Teton Westwood
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and Teton is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Teton Westwood go up and down completely randomly.
Pair Corralation between NYSE Composite and Teton Westwood
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.45 times more return on investment than Teton Westwood. However, NYSE Composite is 2.24 times less risky than Teton Westwood. It trades about 0.3 of its potential returns per unit of risk. Teton Westwood Balanced is currently generating about -0.09 per unit of risk. If you would invest 1,941,627 in NYSE Composite on August 31, 2024 and sell it today you would earn a total of 85,577 from holding NYSE Composite or generate 4.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
NYSE Composite vs. Teton Westwood Balanced
Performance |
| Timeline |
NYSE Composite and Teton Westwood Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Teton Westwood Balanced
Pair trading matchups for Teton Westwood
Pair Trading with NYSE Composite and Teton Westwood
The main advantage of trading using opposite NYSE Composite and Teton Westwood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Teton Westwood vs. American Funds American | Teton Westwood vs. American Funds American | Teton Westwood vs. American Balanced | Teton Westwood vs. American Balanced Fund |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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