Correlation Between Tekla Life and Voya Asia
Can any of the company-specific risk be diversified away by investing in both Tekla Life and Voya Asia 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 Life and Voya Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tekla Life Sciences and Voya Asia Pacific, you can compare the effects of market volatilities on Tekla Life and Voya Asia 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 Life with a short position of Voya Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Life and Voya Asia.
Diversification Opportunities for Tekla Life and Voya Asia
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tekla and Voya is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Life Sciences and Voya Asia Pacific in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voya Asia Pacific and Tekla Life 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 Life Sciences are associated (or correlated) with Voya Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voya Asia Pacific has no effect on the direction of Tekla Life i.e., Tekla Life and Voya Asia go up and down completely randomly.
Pair Corralation between Tekla Life and Voya Asia
Considering the 90-day investment horizon Tekla Life Sciences is expected to generate 1.84 times more return on investment than Voya Asia. However, Tekla Life is 1.84 times more volatile than Voya Asia Pacific. It trades about 0.02 of its potential returns per unit of risk. Voya Asia Pacific is currently generating about -0.16 per unit of risk. If you would invest 1,420 in Tekla Life Sciences on September 4, 2024 and sell it today you would earn a total of 6.00 from holding Tekla Life Sciences or generate 0.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Tekla Life Sciences vs. Voya Asia Pacific
Performance |
| Timeline |
| Tekla Life Sciences |
| Voya Asia Pacific |
Tekla Life and Voya Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Life and Voya Asia
The main advantage of trading using opposite Tekla Life and Voya Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Life position performs unexpectedly, Voya Asia 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 Voya Asia will offset losses from the drop in Voya Asia's long position.| Tekla Life vs. Tekla World Healthcare | Tekla Life vs. Tekla Healthcare Opportunities | Tekla Life vs. Royce Value Closed | Tekla Life vs. John Hancock Financial |
| Voya Asia vs. Eaton Vance Tax Managed | Voya Asia vs. Eaton Vance Tax | Voya Asia vs. Eaton Vance Risk | Voya Asia vs. Eaton Vance Tax |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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