Correlation Between Teton Convertible and Teton Westwood
Can any of the company-specific risk be diversified away by investing in both Teton Convertible 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 Teton Convertible and Teton Westwood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teton Vertible Securities and Teton Westwood Small, you can compare the effects of market volatilities on Teton Convertible 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 Teton Convertible with a short position of Teton Westwood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teton Convertible and Teton Westwood.
Diversification Opportunities for Teton Convertible and Teton Westwood
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Teton and Teton is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Teton Vertible Securities and Teton Westwood Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teton Westwood Small and Teton Convertible 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 Teton Vertible Securities 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 Small has no effect on the direction of Teton Convertible i.e., Teton Convertible and Teton Westwood go up and down completely randomly.
Pair Corralation between Teton Convertible and Teton Westwood
Assuming the 90 days horizon Teton Vertible Securities is expected to generate 0.43 times more return on investment than Teton Westwood. However, Teton Vertible Securities is 2.32 times less risky than Teton Westwood. It trades about 0.31 of its potential returns per unit of risk. Teton Westwood Small is currently generating about 0.12 per unit of risk. If you would invest 1,350 in Teton Vertible Securities on August 28, 2024 and sell it today you would earn a total of 164.00 from holding Teton Vertible Securities or generate 12.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teton Vertible Securities vs. Teton Westwood Small
Performance |
| Timeline |
| Teton Vertible Securities |
| Teton Westwood Small |
Teton Convertible and Teton Westwood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teton Convertible and Teton Westwood
The main advantage of trading using opposite Teton Convertible and Teton Westwood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teton Convertible 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.| Teton Convertible vs. Teton Westwood Balanced | Teton Convertible vs. Teton Westwood Balanced | Teton Convertible vs. Teton Westwood Balanced | Teton Convertible vs. Teton Westwood Balanced |
| Teton Westwood vs. The Gabelli Small | Teton Westwood vs. Teton Westwood Equity | Teton Westwood vs. The Gabelli Equity | Teton Westwood vs. Heartland Value Plus |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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