Correlation Between Teton Westwood and Pax Balanced
Can any of the company-specific risk be diversified away by investing in both Teton Westwood and Pax Balanced 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 Pax Balanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teton Westwood Equity and Pax Balanced Fund, you can compare the effects of market volatilities on Teton Westwood and Pax Balanced 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 Pax Balanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teton Westwood and Pax Balanced.
Diversification Opportunities for Teton Westwood and Pax Balanced
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Teton and Pax is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Teton Westwood Equity and Pax Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pax Balanced 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 Equity are associated (or correlated) with Pax Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pax Balanced has no effect on the direction of Teton Westwood i.e., Teton Westwood and Pax Balanced go up and down completely randomly.
Pair Corralation between Teton Westwood and Pax Balanced
Assuming the 90 days horizon Teton Westwood Equity is expected to under-perform the Pax Balanced. In addition to that, Teton Westwood is 3.77 times more volatile than Pax Balanced Fund. It trades about -0.07 of its total potential returns per unit of risk. Pax Balanced Fund is currently generating about 0.1 per unit of volatility. If you would invest 2,663 in Pax Balanced Fund on August 31, 2024 and sell it today you would earn a total of 29.00 from holding Pax Balanced Fund or generate 1.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teton Westwood Equity vs. Pax Balanced Fund
Performance |
| Timeline |
| Teton Westwood Equity |
| Pax Balanced |
Teton Westwood and Pax Balanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teton Westwood and Pax Balanced
The main advantage of trading using opposite Teton Westwood and Pax Balanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teton Westwood position performs unexpectedly, Pax Balanced 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 Pax Balanced will offset losses from the drop in Pax Balanced's long position.| Teton Westwood vs. Vanguard Value Index | Teton Westwood vs. Dodge Cox Stock | Teton Westwood vs. American Mutual Fund | Teton Westwood vs. American Funds American |
| Pax Balanced vs. Pax Esg Beta | Pax Balanced vs. Pax High Yield | Pax Balanced vs. Domini Impact Equity | Pax Balanced vs. Neuberger Berman Socially |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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