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 Equity, 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

0.22

Correlation Coefficient

The Gabelli  Teton Westwood

Modest diversification

The 3 months correlation between The and Teton is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding The Gabelli Asset and Teton Westwood Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teton Westwood Equity 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 Equity 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 Asset is expected to under-perform the Teton Westwood. In addition to that, The Gabelli is 2.53 times more volatile than Teton Westwood Equity. It trades about -0.1 of its total potential returns per unit of risk. Teton Westwood Equity is currently generating about -0.01 per unit of volatility. If you would invest  1,106  in Teton Westwood Equity on December 20, 2024 and sell it today you would lose (9.00) from holding Teton Westwood Equity or give up 0.81% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

The Gabelli Asset  vs.  Teton Westwood Equity

Gabelli Asset

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Gabelli Asset has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Teton Westwood Equity

Risk-Adjusted Performance

Very Weak

Over the last 90 days Teton Westwood Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic 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 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 idea behind The Gabelli Asset and Teton Westwood Equity 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.