Correlation Between Ares Dynamic and Tekla Healthcare
Can any of the company-specific risk be diversified away by investing in both Ares Dynamic and Tekla Healthcare 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 Ares Dynamic and Tekla Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ares Dynamic Credit and Tekla Healthcare Investors, you can compare the effects of market volatilities on Ares Dynamic and Tekla Healthcare 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 Ares Dynamic with a short position of Tekla Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ares Dynamic and Tekla Healthcare.
Diversification Opportunities for Ares Dynamic and Tekla Healthcare
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ares and Tekla is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Ares Dynamic Credit and Tekla Healthcare Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekla Healthcare Inv and Ares Dynamic 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 Ares Dynamic Credit are associated (or correlated) with Tekla Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tekla Healthcare Inv has no effect on the direction of Ares Dynamic i.e., Ares Dynamic and Tekla Healthcare go up and down completely randomly.
Pair Corralation between Ares Dynamic and Tekla Healthcare
Given the investment horizon of 90 days Ares Dynamic Credit is expected to generate 0.54 times more return on investment than Tekla Healthcare. However, Ares Dynamic Credit is 1.85 times less risky than Tekla Healthcare. It trades about 0.06 of its potential returns per unit of risk. Tekla Healthcare Investors is currently generating about -0.11 per unit of risk. If you would invest 1,506 in Ares Dynamic Credit on September 3, 2024 and sell it today you would earn a total of 28.00 from holding Ares Dynamic Credit or generate 1.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ares Dynamic Credit vs. Tekla Healthcare Investors
Performance |
| Timeline |
| Ares Dynamic Credit |
| Tekla Healthcare Inv |
Ares Dynamic and Tekla Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ares Dynamic and Tekla Healthcare
The main advantage of trading using opposite Ares Dynamic and Tekla Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ares Dynamic position performs unexpectedly, Tekla Healthcare 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 Tekla Healthcare will offset losses from the drop in Tekla Healthcare's long position.| Ares Dynamic vs. Tekla Healthcare Investors | Ares Dynamic vs. Tekla Life Sciences | Ares Dynamic vs. Cohen Steers Reit | Ares Dynamic vs. XAI Octagon Floating |
| Tekla Healthcare vs. Tekla Healthcare Opportunities | Tekla Healthcare vs. Eaton Vance Tax | Tekla Healthcare vs. Tekla World Healthcare | Tekla Healthcare vs. Cohen Steers Limited |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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