Correlation Between Balanced Fund and Tekla Healthcare
Can any of the company-specific risk be diversified away by investing in both Balanced Fund 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 Balanced Fund and Tekla Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Balanced Fund Retail and Tekla Healthcare Investors, you can compare the effects of market volatilities on Balanced Fund 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 Balanced Fund with a short position of Tekla Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Balanced Fund and Tekla Healthcare.
Diversification Opportunities for Balanced Fund and Tekla Healthcare
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Balanced and Tekla is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Balanced Fund Retail 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 Balanced Fund 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 Balanced Fund Retail 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 Balanced Fund i.e., Balanced Fund and Tekla Healthcare go up and down completely randomly.
Pair Corralation between Balanced Fund and Tekla Healthcare
Assuming the 90 days horizon Balanced Fund Retail is expected to under-perform the Tekla Healthcare. But the mutual fund apears to be less risky and, when comparing its historical volatility, Balanced Fund Retail is 1.29 times less risky than Tekla Healthcare. The mutual fund trades about -0.27 of its potential returns per unit of risk. The Tekla Healthcare Investors is currently generating about -0.13 of returns per unit of risk over similar time horizon. If you would invest 1,894 in Tekla Healthcare Investors on October 16, 2024 and sell it today you would lose (45.00) from holding Tekla Healthcare Investors or give up 2.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Balanced Fund Retail vs. Tekla Healthcare Investors
Performance |
| Timeline |
| Balanced Fund Retail |
| Tekla Healthcare Inv |
Balanced Fund and Tekla Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Balanced Fund and Tekla Healthcare
The main advantage of trading using opposite Balanced Fund and Tekla Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Balanced Fund 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.| Balanced Fund vs. Muirfield Fund Retail | Balanced Fund vs. Dynamic Growth Fund | Balanced Fund vs. Infrastructure Fund Retail | Balanced Fund vs. Quantex Fund Retail |
| Tekla Healthcare vs. Balanced Fund Retail | Tekla Healthcare vs. Aqr Long Short Equity | Tekla Healthcare vs. Enhanced Fixed Income | Tekla Healthcare vs. Qs Global Equity |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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