Correlation Between Value Line and Teton Westwood
Can any of the company-specific risk be diversified away by investing in both Value Line 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 Value Line and Teton Westwood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Value Line Income and Teton Westwood Equity, you can compare the effects of market volatilities on Value Line 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 Value Line with a short position of Teton Westwood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Value Line and Teton Westwood.
Diversification Opportunities for Value Line and Teton Westwood
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Value and Teton is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Value Line Income 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 Value Line 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 Value Line Income 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 Value Line i.e., Value Line and Teton Westwood go up and down completely randomly.
Pair Corralation between Value Line and Teton Westwood
Assuming the 90 days horizon Value Line Income is expected to generate 0.5 times more return on investment than Teton Westwood. However, Value Line Income is 1.99 times less risky than Teton Westwood. It trades about 0.23 of its potential returns per unit of risk. Teton Westwood Equity is currently generating about -0.07 per unit of risk. If you would invest 1,240 in Value Line Income on August 31, 2024 and sell it today you would earn a total of 59.00 from holding Value Line Income or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Value Line Income vs. Teton Westwood Equity
Performance |
| Timeline |
| Value Line Income |
| Teton Westwood Equity |
Value Line and Teton Westwood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Value Line and Teton Westwood
The main advantage of trading using opposite Value Line and Teton Westwood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Value Line 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.| Value Line vs. American Funds American | Value Line vs. American Funds American | Value Line vs. American Balanced | Value Line vs. American Balanced Fund |
| Teton Westwood vs. Vanguard Value Index | Teton Westwood vs. Dodge Cox Stock | Teton Westwood vs. American Mutual Fund | Teton Westwood vs. American Funds American |
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..
Other Complementary Tools
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |