Correlation Between Tekla Healthcare and Gabelli Utility
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Gabelli Utility 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 Gabelli Utility 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 Gabelli Utility Closed, you can compare the effects of market volatilities on Tekla Healthcare and Gabelli Utility 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 Gabelli Utility. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Gabelli Utility.
Diversification Opportunities for Tekla Healthcare and Gabelli Utility
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Tekla and Gabelli is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Investors and Gabelli Utility Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Utility Closed 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 Gabelli Utility. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Utility Closed has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Gabelli Utility go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Gabelli Utility
Considering the 90-day investment horizon Tekla Healthcare Investors is expected to generate 0.75 times more return on investment than Gabelli Utility. However, Tekla Healthcare Investors is 1.33 times less risky than Gabelli Utility. It trades about 0.1 of its potential returns per unit of risk. Gabelli Utility Closed is currently generating about 0.0 per unit of risk. If you would invest 1,411 in Tekla Healthcare Investors on September 4, 2024 and sell it today you would earn a total of 351.00 from holding Tekla Healthcare Investors or generate 24.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tekla Healthcare Investors vs. Gabelli Utility Closed
Performance |
| Timeline |
| Tekla Healthcare Inv |
| Gabelli Utility Closed |
Tekla Healthcare and Gabelli Utility Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and Gabelli Utility
The main advantage of trading using opposite Tekla Healthcare and Gabelli Utility positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Gabelli Utility 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 Gabelli Utility will offset losses from the drop in Gabelli Utility'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 |
| Gabelli Utility vs. Cohen Steers Reit | Gabelli Utility vs. Cohen Steers Qualityome | Gabelli Utility vs. Pimco Corporate Income | Gabelli Utility vs. Tekla Healthcare Investors |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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