Correlation Between Teton Westwood and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Teton Westwood and Dow Jones 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 Westwood and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teton Westwood Mighty and Dow Jones Industrial, you can compare the effects of market volatilities on Teton Westwood and Dow Jones 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 Westwood with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teton Westwood and Dow Jones.
Diversification Opportunities for Teton Westwood and Dow Jones
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Teton and Dow is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Teton Westwood Mighty and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Teton Westwood 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 Westwood Mighty are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Teton Westwood i.e., Teton Westwood and Dow Jones go up and down completely randomly.
Pair Corralation between Teton Westwood and Dow Jones
Assuming the 90 days horizon Teton Westwood Mighty is expected to under-perform the Dow Jones. In addition to that, Teton Westwood is 2.66 times more volatile than Dow Jones Industrial. It trades about -0.02 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.11 per unit of volatility. If you would invest 3,361,869 in Dow Jones Industrial on August 30, 2024 and sell it today you would earn a total of 1,110,337 from holding Dow Jones Industrial or generate 33.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teton Westwood Mighty vs. Dow Jones Industrial
Performance |
| Timeline |
Teton Westwood and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Teton Westwood Mighty
Pair trading matchups for Teton Westwood
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Teton Westwood and Dow Jones
The main advantage of trading using opposite Teton Westwood and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teton Westwood position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Teton Westwood vs. Vanguard Small Cap Index | Teton Westwood vs. T Rowe Price | Teton Westwood vs. HUMANA INC | Teton Westwood vs. Aquagold International |
| Dow Jones vs. Kaltura | Dow Jones vs. Artisan Partners Asset | Dow Jones vs. US Global Investors | Dow Jones vs. Analog Devices |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |