Correlation Between Sextant Short and Teton Westwood
Can any of the company-specific risk be diversified away by investing in both Sextant Short 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 Sextant Short and Teton Westwood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sextant Short Term Bond and Teton Westwood Equity, you can compare the effects of market volatilities on Sextant Short 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 Sextant Short with a short position of Teton Westwood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sextant Short and Teton Westwood.
Diversification Opportunities for Sextant Short and Teton Westwood
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sextant and Teton is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sextant Short Term Bond and Teton Westwood Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teton Westwood Equity and Sextant Short 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 Sextant Short Term Bond 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 Equity has no effect on the direction of Sextant Short i.e., Sextant Short and Teton Westwood go up and down completely randomly.
Pair Corralation between Sextant Short and Teton Westwood
Assuming the 90 days horizon Sextant Short Term Bond is expected to generate 0.07 times more return on investment than Teton Westwood. However, Sextant Short Term Bond is 14.6 times less risky than Teton Westwood. It trades about 0.05 of its potential returns per unit of risk. Teton Westwood Equity is currently generating about -0.12 per unit of risk. If you would invest 494.00 in Sextant Short Term Bond on September 13, 2024 and sell it today you would earn a total of 1.00 from holding Sextant Short Term Bond or generate 0.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sextant Short Term Bond vs. Teton Westwood Equity
Performance |
| Timeline |
| Sextant Short Term |
| Teton Westwood Equity |
Sextant Short and Teton Westwood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sextant Short and Teton Westwood
The main advantage of trading using opposite Sextant Short and Teton Westwood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sextant Short 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.| Sextant Short vs. Sextant Growth Fund | Sextant Short vs. Sextant International Fund | Sextant Short vs. Sextant Bond Income | Sextant Short vs. Sextant E Fund |
| Teton Westwood vs. Teton Westwood Balanced | Teton Westwood vs. Teton Westwood Small | Teton Westwood vs. The Gabelli Asset | Teton Westwood vs. Teton Westwood Mighty |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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