Correlation Between Pax Balanced and Teton Westwood
Can any of the company-specific risk be diversified away by investing in both Pax Balanced 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 Pax Balanced and Teton Westwood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pax Balanced Fund and Teton Westwood Balanced, you can compare the effects of market volatilities on Pax Balanced 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 Pax Balanced with a short position of Teton Westwood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pax Balanced and Teton Westwood.
Diversification Opportunities for Pax Balanced and Teton Westwood
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pax and Teton is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Pax Balanced Fund 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 Pax Balanced 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 Pax Balanced Fund 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 Pax Balanced i.e., Pax Balanced and Teton Westwood go up and down completely randomly.
Pair Corralation between Pax Balanced and Teton Westwood
Assuming the 90 days horizon Pax Balanced is expected to generate 2.51 times less return on investment than Teton Westwood. But when comparing it to its historical volatility, Pax Balanced Fund is 1.15 times less risky than Teton Westwood. It trades about 0.1 of its potential returns per unit of risk. Teton Westwood Balanced is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,080 in Teton Westwood Balanced on August 27, 2024 and sell it today you would earn a total of 29.00 from holding Teton Westwood Balanced or generate 2.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pax Balanced Fund vs. Teton Westwood Balanced
Performance |
| Timeline |
| Pax Balanced |
| Teton Westwood Balanced |
Pax Balanced and Teton Westwood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pax Balanced and Teton Westwood
The main advantage of trading using opposite Pax Balanced and Teton Westwood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pax Balanced 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.| Pax Balanced vs. Pax Esg Beta | Pax Balanced vs. Pax High Yield | Pax Balanced vs. Domini Impact Equity | Pax Balanced vs. Neuberger Berman Socially |
| Teton Westwood vs. Teton Westwood Equity | Teton Westwood vs. Pax Balanced Fund | Teton Westwood vs. Value Line Income | Teton Westwood vs. Teton Westwood Small |
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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