Correlation Between Teton Westwood and Sextant Growth
Can any of the company-specific risk be diversified away by investing in both Teton Westwood and Sextant Growth 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 Sextant Growth 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 Sextant Growth Fund, you can compare the effects of market volatilities on Teton Westwood and Sextant Growth 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 Sextant Growth. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teton Westwood and Sextant Growth.
Diversification Opportunities for Teton Westwood and Sextant Growth
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Teton and Sextant is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Teton Westwood Equity and Sextant Growth Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sextant Growth 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 Sextant Growth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sextant Growth has no effect on the direction of Teton Westwood i.e., Teton Westwood and Sextant Growth go up and down completely randomly.
Pair Corralation between Teton Westwood and Sextant Growth
Assuming the 90 days horizon Teton Westwood is expected to generate 3.17 times less return on investment than Sextant Growth. But when comparing it to its historical volatility, Teton Westwood Equity is 1.24 times less risky than Sextant Growth. It trades about 0.04 of its potential returns per unit of risk. Sextant Growth Fund is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,567 in Sextant Growth Fund on September 6, 2024 and sell it today you would earn a total of 2,239 from holding Sextant Growth Fund or generate 62.77% 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. Sextant Growth Fund
Performance |
Timeline |
Teton Westwood Equity |
Sextant Growth |
Teton Westwood and Sextant Growth Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Teton Westwood and Sextant Growth
The main advantage of trading using opposite Teton Westwood and Sextant Growth positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teton Westwood position performs unexpectedly, Sextant Growth 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 Sextant Growth will offset losses from the drop in Sextant Growth's long position.Teton Westwood vs. Teton Westwood Balanced | Teton Westwood vs. Teton Westwood Small | Teton Westwood vs. The Gabelli Asset | Teton Westwood vs. Teton Westwood Mighty |
Sextant Growth vs. Sextant International Fund | Sextant Growth vs. Sextant Bond Income | Sextant Growth vs. Teton Westwood Equity | Sextant Growth vs. Value Line Premier |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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