Correlation Between Tekla Healthcare and PGIM Short
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and PGIM Short 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 PGIM Short 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 PGIM Short Duration, you can compare the effects of market volatilities on Tekla Healthcare and PGIM Short 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 PGIM Short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and PGIM Short.
Diversification Opportunities for Tekla Healthcare and PGIM Short
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tekla and PGIM is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Investors and PGIM Short Duration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PGIM Short Duration 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 PGIM Short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PGIM Short Duration has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and PGIM Short go up and down completely randomly.
Pair Corralation between Tekla Healthcare and PGIM Short
Considering the 90-day investment horizon Tekla Healthcare Investors is expected to generate 2.26 times more return on investment than PGIM Short. However, Tekla Healthcare is 2.26 times more volatile than PGIM Short Duration. It trades about 0.07 of its potential returns per unit of risk. PGIM Short Duration is currently generating about 0.16 per unit of risk. If you would invest 1,515 in Tekla Healthcare Investors on November 9, 2024 and sell it today you would earn a total of 301.00 from holding Tekla Healthcare Investors or generate 19.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tekla Healthcare Investors vs. PGIM Short Duration
Performance |
| Timeline |
| Tekla Healthcare Inv |
| PGIM Short Duration |
Tekla Healthcare and PGIM Short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and PGIM Short
The main advantage of trading using opposite Tekla Healthcare and PGIM Short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, PGIM Short 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 PGIM Short will offset losses from the drop in PGIM Short'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 |
| PGIM Short vs. John Hancock Income | PGIM Short vs. MFS High Income | PGIM Short vs. MFS Investment Grade | PGIM Short vs. Blackrock Muniholdings Closed |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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