Correlation Between Sterling Capital and Tekla Healthcare
Can any of the company-specific risk be diversified away by investing in both Sterling Capital 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 Sterling Capital and Tekla Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Capital Behavioral and Tekla Healthcare Opportunities, you can compare the effects of market volatilities on Sterling Capital 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 Sterling Capital with a short position of Tekla Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Capital and Tekla Healthcare.
Diversification Opportunities for Sterling Capital and Tekla Healthcare
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sterling and Tekla is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Capital Behavioral and Tekla Healthcare Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekla Healthcare Opp and Sterling Capital 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 Sterling Capital Behavioral 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 Opp has no effect on the direction of Sterling Capital i.e., Sterling Capital and Tekla Healthcare go up and down completely randomly.
Pair Corralation between Sterling Capital and Tekla Healthcare
Assuming the 90 days horizon Sterling Capital Behavioral is expected to generate 0.77 times more return on investment than Tekla Healthcare. However, Sterling Capital Behavioral is 1.3 times less risky than Tekla Healthcare. It trades about 0.15 of its potential returns per unit of risk. Tekla Healthcare Opportunities is currently generating about 0.07 per unit of risk. If you would invest 2,653 in Sterling Capital Behavioral on September 3, 2024 and sell it today you would earn a total of 416.00 from holding Sterling Capital Behavioral or generate 15.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Capital Behavioral vs. Tekla Healthcare Opportunities
Performance |
| Timeline |
| Sterling Capital Beh |
| Tekla Healthcare Opp |
Sterling Capital and Tekla Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Capital and Tekla Healthcare
The main advantage of trading using opposite Sterling Capital and Tekla Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Capital 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.| Sterling Capital vs. Gabelli Gold Fund | Sterling Capital vs. Goldman Sachs Clean | Sterling Capital vs. Gold And Precious | Sterling Capital vs. First Eagle Gold |
| Tekla Healthcare vs. Tekla Healthcare Investors | Tekla Healthcare vs. Tekla Life Sciences | Tekla Healthcare vs. Cohen Steers Reit | Tekla Healthcare vs. XAI Octagon Floating |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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