Correlation Between Tekla Healthcare and Gdl Closed

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

Diversification Opportunities for Tekla Healthcare and Gdl Closed

-0.16
  Correlation Coefficient

Good diversification

The 3 months correlation between Tekla and Gdl is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Investors and Gdl Closed Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gdl Closed Fund and Tekla Healthcare 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 Tekla Healthcare Investors are associated (or correlated) with Gdl Closed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gdl Closed Fund has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Gdl Closed go up and down completely randomly.

Pair Corralation between Tekla Healthcare and Gdl Closed

Considering the 90-day investment horizon Tekla Healthcare Investors is expected to generate 2.5 times more return on investment than Gdl Closed. However, Tekla Healthcare is 2.5 times more volatile than Gdl Closed Fund. It trades about 0.05 of its potential returns per unit of risk. Gdl Closed Fund is currently generating about 0.08 per unit of risk. If you would invest  1,483  in Tekla Healthcare Investors on September 4, 2024 and sell it today you would earn a total of  286.00  from holding Tekla Healthcare Investors or generate 19.29% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Tekla Healthcare Investors  vs.  Gdl Closed Fund

 Performance 
       Timeline  
Tekla Healthcare Inv 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Tekla Healthcare Investors has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Tekla Healthcare is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.
Gdl Closed Fund 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Gdl Closed Fund are ranked lower than 5 (%) of all funds and portfolios of funds over the last 90 days. Despite quite persistent fundamental indicators, Gdl Closed is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Tekla Healthcare and Gdl Closed Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Tekla Healthcare and Gdl Closed

The main advantage of trading using opposite Tekla Healthcare and Gdl Closed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Gdl Closed 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 Gdl Closed will offset losses from the drop in Gdl Closed's long position.
The idea behind Tekla Healthcare Investors and Gdl Closed Fund 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.
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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