Correlation Between Tekla Healthcare and Western Asset
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Western Asset 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 Western Asset 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 Western Asset High, you can compare the effects of market volatilities on Tekla Healthcare and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Western Asset.
Diversification Opportunities for Tekla Healthcare and Western Asset
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tekla and Western is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Investors and Western Asset High in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset High 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset High has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Western Asset go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Western Asset
Considering the 90-day investment horizon Tekla Healthcare is expected to generate 1.34 times less return on investment than Western Asset. In addition to that, Tekla Healthcare is 1.33 times more volatile than Western Asset High. It trades about 0.03 of its total potential returns per unit of risk. Western Asset High is currently generating about 0.05 per unit of volatility. If you would invest 337.00 in Western Asset High on August 27, 2024 and sell it today you would earn a total of 58.00 from holding Western Asset High or generate 17.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tekla Healthcare Investors vs. Western Asset High
Performance |
| Timeline |
| Tekla Healthcare Inv |
| Western Asset High |
Tekla Healthcare and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and Western Asset
The main advantage of trading using opposite Tekla Healthcare and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset'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 |
| Western Asset vs. Pimco Dynamic Income | Western Asset vs. Pimco Corporate Income | Western Asset vs. Cornerstone Strategic Value | Western Asset vs. Cornerstone Strategic Return |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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