Correlation Between Teton Westwood and Investment

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Can any of the company-specific risk be diversified away by investing in both Teton Westwood and Investment 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 Investment 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 Investment Of America, you can compare the effects of market volatilities on Teton Westwood and Investment 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 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teton Westwood and Investment.

Diversification Opportunities for Teton Westwood and Investment

0.94
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Teton and Investment is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding TETON WESTWOOD EQUITY and INVESTMENT OF AMERICA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment Of America 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 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment Of America has no effect on the direction of Teton Westwood i.e., Teton Westwood and Investment go up and down completely randomly.

Pair Corralation between Teton Westwood and Investment

Assuming the 90 days horizon Teton Westwood Equity is expected to generate 0.63 times more return on investment than Investment. However, Teton Westwood Equity is 1.59 times less risky than Investment. It trades about 0.41 of its potential returns per unit of risk. Investment Of America is currently generating about 0.19 per unit of risk. If you would invest  1,001  in Teton Westwood Equity on December 29, 2023 and sell it today you would earn a total of  39.00  from holding Teton Westwood Equity or generate 3.9% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy95.65%
ValuesDaily Returns

TETON WESTWOOD EQUITY  vs.  INVESTMENT OF AMERICA

 Performance 
       Timeline  
Teton Westwood Equity 

Risk-Adjusted Performance

16 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Teton Westwood Equity are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Teton Westwood may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Investment Of America 

Risk-Adjusted Performance

16 of 100

 
Low
 
High
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Investment Of America are ranked lower than 16 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Investment may actually be approaching a critical reversion point that can send shares even higher in April 2024.

Teton Westwood and Investment Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Teton Westwood and Investment

The main advantage of trading using opposite Teton Westwood and Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teton Westwood position performs unexpectedly, Investment 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 Investment will offset losses from the drop in Investment's long position.
The idea behind Teton Westwood Equity and Investment Of America pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.

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