Correlation Between Teton Westwood and American Century

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

By analyzing existing cross correlation between Teton Westwood Balanced and American Century Etf, you can compare the effects of market volatilities on Teton Westwood and American Century 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 American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teton Westwood and American Century.

Diversification Opportunities for Teton Westwood and American Century

0.66

Correlation Coefficient

Teton Westwood  American Century

Poor diversification

The 3 months correlation between Teton and American is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Teton Westwood Balanced and American Century Etf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century Etf 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 Balanced are associated (or correlated) with American Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Century Etf has no effect on the direction of Teton Westwood i.e., Teton Westwood and American Century go up and down completely randomly.

Pair Corralation between Teton Westwood and American Century

Assuming the 90 days horizon Teton Westwood Balanced is expected to generate 0.49 times more return on investment than American Century. However, Teton Westwood Balanced is 2.03 times less risky than American Century. It trades about -0.09 of its potential returns per unit of risk. American Century Etf is currently generating about -0.2 per unit of risk. If you would invest  1,068  in Teton Westwood Balanced on December 5, 2024 and sell it today you would lose (30.00) from holding Teton Westwood Balanced or give up 2.81% of portfolio value over 90 days.

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

Teton Westwood Balanced  vs.  American Century Etf

Teton Westwood Balanced

Risk-Adjusted Performance

Very Weak

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

American Century Etf

Risk-Adjusted Performance

Very Weak

Over the last 90 days American Century Etf has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Teton Westwood and American Century

The main advantage of trading using opposite Teton Westwood and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teton Westwood position performs unexpectedly, American Century 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 American Century will offset losses from the drop in American Century's long position.

The idea behind Teton Westwood Balanced and American Century Etf 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.