Correlation Between Ab Small and Teton Westwood
Can any of the company-specific risk be diversified away by investing in both Ab Small 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 Ab Small and Teton Westwood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Small Cap and Teton Westwood Balanced, you can compare the effects of market volatilities on Ab Small 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 Ab Small with a short position of Teton Westwood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Small and Teton Westwood.
Diversification Opportunities for Ab Small and Teton Westwood
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between QUAIX and Teton is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Ab Small Cap 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 Ab Small 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 Ab Small 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 Balanced has no effect on the direction of Ab Small i.e., Ab Small and Teton Westwood go up and down completely randomly.
Pair Corralation between Ab Small and Teton Westwood
Assuming the 90 days horizon Ab Small Cap is expected to generate 1.87 times more return on investment than Teton Westwood. However, Ab Small is 1.87 times more volatile than Teton Westwood Balanced. It trades about 0.0 of its potential returns per unit of risk. Teton Westwood Balanced is currently generating about -0.05 per unit of risk. If you would invest 7,052 in Ab Small Cap on November 28, 2024 and sell it today you would lose (123.00) from holding Ab Small Cap or give up 1.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Small Cap vs. Teton Westwood Balanced
Performance |
| Timeline |
| Ab Small Cap |
| Teton Westwood Balanced |
Ab Small and Teton Westwood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Small and Teton Westwood
The main advantage of trading using opposite Ab Small and Teton Westwood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Small 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.| Ab Small vs. Multimanager Lifestyle Growth | Ab Small vs. Ab Centrated International | Ab Small vs. L Abbett Growth | Ab Small vs. Jpmorgan Large Cap |
| Teton Westwood vs. Payden High Income | Teton Westwood vs. Siit High Yield | Teton Westwood vs. Voya High Yield | Teton Westwood vs. Pace High Yield |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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