Correlation Between Franklin Income and Tekla Healthcare
Can any of the company-specific risk be diversified away by investing in both Franklin Income 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 Franklin Income and Tekla Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Franklin Income Fund and Tekla Healthcare Opportunities, you can compare the effects of market volatilities on Franklin Income 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 Franklin Income with a short position of Tekla Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Franklin Income and Tekla Healthcare.
Diversification Opportunities for Franklin Income and Tekla Healthcare
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Franklin and Tekla is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Franklin Income Fund 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 Franklin Income 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 Franklin Income Fund 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 Franklin Income i.e., Franklin Income and Tekla Healthcare go up and down completely randomly.
Pair Corralation between Franklin Income and Tekla Healthcare
Assuming the 90 days horizon Franklin Income Fund is expected to under-perform the Tekla Healthcare. But the mutual fund apears to be less risky and, when comparing its historical volatility, Franklin Income Fund is 4.27 times less risky than Tekla Healthcare. The mutual fund trades about -0.22 of its potential returns per unit of risk. The Tekla Healthcare Opportunities is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,916 in Tekla Healthcare Opportunities on September 18, 2024 and sell it today you would earn a total of 6.00 from holding Tekla Healthcare Opportunities or generate 0.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Franklin Income Fund vs. Tekla Healthcare Opportunities
Performance |
| Timeline |
| Franklin Income |
| Tekla Healthcare Opp |
Franklin Income and Tekla Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Franklin Income and Tekla Healthcare
The main advantage of trading using opposite Franklin Income and Tekla Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Franklin Income 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.| Franklin Income vs. Tekla Healthcare Opportunities | Franklin Income vs. Eventide Healthcare Life | Franklin Income vs. Vanguard Health Care | Franklin Income vs. Allianzgi Health Sciences |
| 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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