Correlation Between Tekla Life and Korea Closed
Can any of the company-specific risk be diversified away by investing in both Tekla Life and Korea Closed 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 Korea Closed 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 Korea Closed, you can compare the effects of market volatilities on Tekla Life and Korea Closed 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 Korea Closed. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Life and Korea Closed.
Diversification Opportunities for Tekla Life and Korea Closed
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tekla and Korea is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Life Sciences and Korea Closed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Korea Closed 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 Korea Closed. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Korea Closed has no effect on the direction of Tekla Life i.e., Tekla Life and Korea Closed go up and down completely randomly.
Pair Corralation between Tekla Life and Korea Closed
Considering the 90-day investment horizon Tekla Life Sciences is expected to generate 0.84 times more return on investment than Korea Closed. However, Tekla Life Sciences is 1.19 times less risky than Korea Closed. It trades about 0.06 of its potential returns per unit of risk. Korea Closed is currently generating about -0.1 per unit of risk. If you would invest 1,281 in Tekla Life Sciences on August 24, 2024 and sell it today you would earn a total of 102.00 from holding Tekla Life Sciences or generate 7.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tekla Life Sciences vs. Korea Closed
Performance |
| Timeline |
| Tekla Life Sciences |
| Korea Closed |
Tekla Life and Korea Closed Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Life and Korea Closed
The main advantage of trading using opposite Tekla Life and Korea Closed positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Life position performs unexpectedly, Korea Closed 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 Korea Closed will offset losses from the drop in Korea Closed'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 |
| Korea Closed vs. Tekla Healthcare Investors | Korea Closed vs. Blackrock Enhanced Capital | Korea Closed vs. Tekla Life Sciences | Korea Closed vs. Nuveen New York |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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