Correlation Between Guidemark Large and Tekla Healthcare

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Guidemark Large 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 Guidemark Large and Tekla Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guidemark Large Cap and Tekla Healthcare Opportunities, you can compare the effects of market volatilities on Guidemark Large 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 Guidemark Large with a short position of Tekla Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guidemark Large and Tekla Healthcare.

Diversification Opportunities for Guidemark Large and Tekla Healthcare

-0.5
  Correlation Coefficient

Very good diversification

The 3 months correlation between Guidemark and Tekla is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Guidemark Large Cap 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 Guidemark Large 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 Guidemark Large Cap 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 Guidemark Large i.e., Guidemark Large and Tekla Healthcare go up and down completely randomly.

Pair Corralation between Guidemark Large and Tekla Healthcare

Assuming the 90 days horizon Guidemark Large Cap is expected to generate 0.87 times more return on investment than Tekla Healthcare. However, Guidemark Large Cap is 1.15 times less risky than Tekla Healthcare. It trades about 0.11 of its potential returns per unit of risk. Tekla Healthcare Opportunities is currently generating about 0.05 per unit of risk. If you would invest  2,611  in Guidemark Large Cap on September 12, 2024 and sell it today you would earn a total of  928.00  from holding Guidemark Large Cap or generate 35.54% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Guidemark Large Cap  vs.  Tekla Healthcare Opportunities

 Performance 
       Timeline  
Guidemark Large Cap 

Risk-Adjusted Performance

17 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Guidemark Large Cap are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Guidemark Large may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Tekla Healthcare Opp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Tekla Healthcare Opportunities has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively invariable technical indicators, Tekla Healthcare is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Guidemark Large and Tekla Healthcare Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Guidemark Large and Tekla Healthcare

The main advantage of trading using opposite Guidemark Large and Tekla Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guidemark Large 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.
The idea behind Guidemark Large Cap and Tekla Healthcare Opportunities 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.
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

Other Complementary Tools

Fundamental Analysis
View fundamental data based on most recent published financial statements
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Bond Analysis
Evaluate and analyze corporate bonds as a potential investment for your portfolios.
Idea Breakdown
Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes