Correlation Between The Gabelli and Teton Westwood
Can any of the company-specific risk be diversified away by investing in both The Gabelli 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 The Gabelli and Teton Westwood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Gabelli Asset and Teton Westwood Small, you can compare the effects of market volatilities on The Gabelli 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 The Gabelli with a short position of Teton Westwood. Check out your portfolio center. Please also check ongoing floating volatility patterns of The Gabelli and Teton Westwood.
Diversification Opportunities for The Gabelli and Teton Westwood
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between The and Teton is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Asset 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 The Gabelli 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 The Gabelli Asset 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 The Gabelli i.e., The Gabelli and Teton Westwood go up and down completely randomly.
Pair Corralation between The Gabelli and Teton Westwood
Assuming the 90 days horizon The Gabelli is expected to generate 1.02 times less return on investment than Teton Westwood. But when comparing it to its historical volatility, The Gabelli Asset is 1.36 times less risky than Teton Westwood. It trades about 0.05 of its potential returns per unit of risk. Teton Westwood Small is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,107 in Teton Westwood Small on April 2, 2024 and sell it today you would earn a total of 404.00 from holding Teton Westwood Small or generate 19.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
The Gabelli Asset vs. Teton Westwood Small
Performance |
Timeline |
Gabelli Asset |
Teton Westwood Small |
The Gabelli and Teton Westwood Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with The Gabelli and Teton Westwood
The main advantage of trading using opposite The Gabelli and Teton Westwood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if The Gabelli 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.The Gabelli vs. Vanguard Total Stock | The Gabelli vs. Vanguard Total Stock | The Gabelli vs. Vanguard 500 Index | The Gabelli vs. Vanguard 500 Index |
Teton Westwood vs. Fidelity Flex Mid | Teton Westwood vs. Fidelity Flex International | Teton Westwood vs. Fidelity Flex 500 | Teton Westwood vs. Fidelity Flex Municipal |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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