Correlation Between Sp Midcap and Teton Westwood
Can any of the company-specific risk be diversified away by investing in both Sp Midcap 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 Sp Midcap and Teton Westwood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sp Midcap Index and Teton Westwood Mighty, you can compare the effects of market volatilities on Sp Midcap 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 Sp Midcap with a short position of Teton Westwood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sp Midcap and Teton Westwood.
Diversification Opportunities for Sp Midcap and Teton Westwood
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SPMIX and Teton is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Sp Midcap Index and Teton Westwood Mighty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teton Westwood Mighty and Sp Midcap 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 Sp Midcap Index 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 Mighty has no effect on the direction of Sp Midcap i.e., Sp Midcap and Teton Westwood go up and down completely randomly.
Pair Corralation between Sp Midcap and Teton Westwood
Assuming the 90 days horizon Sp Midcap Index is expected to under-perform the Teton Westwood. In addition to that, Sp Midcap is 2.73 times more volatile than Teton Westwood Mighty. It trades about -0.18 of its total potential returns per unit of risk. Teton Westwood Mighty is currently generating about 0.09 per unit of volatility. If you would invest 1,668 in Teton Westwood Mighty on September 13, 2024 and sell it today you would earn a total of 21.00 from holding Teton Westwood Mighty or generate 1.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sp Midcap Index vs. Teton Westwood Mighty
Performance |
| Timeline |
| Sp Midcap Index |
| Teton Westwood Mighty |
Sp Midcap and Teton Westwood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sp Midcap and Teton Westwood
The main advantage of trading using opposite Sp Midcap and Teton Westwood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sp Midcap 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.| Sp Midcap vs. Shelton Emerging Markets | Sp Midcap vs. Shelton Emerging Markets | Sp Midcap vs. Shelton Funds | Sp Midcap vs. Nasdaq 100 Index Fund |
| Teton Westwood vs. The Gabelli Small | Teton Westwood vs. Teton Westwood Equity | Teton Westwood vs. Teton Westwood Small | Teton Westwood vs. The Gabelli Equity |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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