Correlation Between Tekla Healthcare and Guggenheim Strategic
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Guggenheim Strategic 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 Guggenheim Strategic 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 Guggenheim Strategic Opportunities, you can compare the effects of market volatilities on Tekla Healthcare and Guggenheim Strategic 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 Guggenheim Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Guggenheim Strategic.
Diversification Opportunities for Tekla Healthcare and Guggenheim Strategic
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tekla and Guggenheim is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Investors and Guggenheim Strategic Opportuni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Strategic 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 Guggenheim Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Strategic has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Guggenheim Strategic go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Guggenheim Strategic
Considering the 90-day investment horizon Tekla Healthcare Investors is expected to under-perform the Guggenheim Strategic. In addition to that, Tekla Healthcare is 3.01 times more volatile than Guggenheim Strategic Opportunities. It trades about -0.21 of its total potential returns per unit of risk. Guggenheim Strategic Opportunities is currently generating about 0.24 per unit of volatility. If you would invest 1,551 in Guggenheim Strategic Opportunities on August 26, 2024 and sell it today you would earn a total of 35.00 from holding Guggenheim Strategic Opportunities or generate 2.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tekla Healthcare Investors vs. Guggenheim Strategic Opportuni
Performance |
| Timeline |
| Tekla Healthcare Inv |
| Guggenheim Strategic |
Tekla Healthcare and Guggenheim Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and Guggenheim Strategic
The main advantage of trading using opposite Tekla Healthcare and Guggenheim Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Guggenheim Strategic 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 Guggenheim Strategic will offset losses from the drop in Guggenheim Strategic's long position.| Tekla Healthcare vs. Tekla Healthcare Opportunities | Tekla Healthcare vs. Eaton Vance Tax | Tekla Healthcare vs. Tekla World Healthcare | Tekla Healthcare vs. Cohen Steers Limited |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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