Correlation Between Deutsche Global and Teton Westwood

Can any of the company-specific risk be diversified away by investing in both Deutsche Global 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 Deutsche Global and Teton Westwood into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Deutsche Global Inflation and Teton Westwood Balanced, you can compare the effects of market volatilities on Deutsche Global 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 Deutsche Global with a short position of Teton Westwood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deutsche Global and Teton Westwood.

Diversification Opportunities for Deutsche Global and Teton Westwood

-0.45

Correlation Coefficient

Deutsche Global  Teton Westwood

Very good diversification

The 3 months correlation between Deutsche and Teton is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Deutsche Global Inflation and Teton Westwood Balanced in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teton Westwood Balanced and Deutsche Global 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 Deutsche Global Inflation 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 Balanced has no effect on the direction of Deutsche Global i.e., Deutsche Global and Teton Westwood go up and down completely randomly.

Pair Corralation between Deutsche Global and Teton Westwood

Assuming the 90 days horizon Deutsche Global is expected to generate 3.75 times less return on investment than Teton Westwood. But when comparing it to its historical volatility, Deutsche Global Inflation is 1.59 times less risky than Teton Westwood. It trades about 0.05 of its potential returns per unit of risk. Teton Westwood Balanced is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  908.00  in Teton Westwood Balanced on September 14, 2024 and sell it today you would earn a total of  120.00  from holding Teton Westwood Balanced or generate 13.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.6%
Values	Daily Returns

Deutsche Global Inflation  vs.  Teton Westwood Balanced

Deutsche Global Inflation

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Deutsche Global Inflation has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Deutsche Global is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Teton Westwood Balanced

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Teton Westwood Balanced are ranked lower than 3 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong forward indicators, Teton Westwood is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Deutsche Global and Teton Westwood

The main advantage of trading using opposite Deutsche Global and Teton Westwood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deutsche Global 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 idea behind Deutsche Global Inflation and Teton Westwood Balanced 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.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.