Correlation Between Teton Westwood and Gold Bullion

Can any of the company-specific risk be diversified away by investing in both Teton Westwood and Gold Bullion 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 Gold Bullion 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 The Gold Bullion, you can compare the effects of market volatilities on Teton Westwood and Gold Bullion 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 Gold Bullion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teton Westwood and Gold Bullion.

Diversification Opportunities for Teton Westwood and Gold Bullion

0.19

Correlation Coefficient

Teton Westwood  Gold Bullion

Average diversification

The 3 months correlation between Teton and Gold is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Teton Westwood Balanced and The Gold Bullion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Bullion 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 Gold Bullion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Bullion has no effect on the direction of Teton Westwood i.e., Teton Westwood and Gold Bullion go up and down completely randomly.

Pair Corralation between Teton Westwood and Gold Bullion

Assuming the 90 days horizon Teton Westwood Balanced is expected to under-perform the Gold Bullion. But the mutual fund apears to be less risky and, when comparing its historical volatility, Teton Westwood Balanced is 1.64 times less risky than Gold Bullion. The mutual fund trades about -0.01 of its potential returns per unit of risk. The The Gold Bullion is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest  1,967  in The Gold Bullion on December 19, 2024 and sell it today you would earn a total of  328.00  from holding The Gold Bullion or generate 16.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Teton Westwood Balanced  vs.  The Gold Bullion

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.

Gold Bullion

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in The Gold Bullion are ranked lower than 23 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Gold Bullion showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Teton Westwood and Gold Bullion

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

The idea behind Teton Westwood Balanced and The Gold Bullion 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.