Correlation Between Nuveen Preferred and Tekla Healthcare
Can any of the company-specific risk be diversified away by investing in both Nuveen Preferred and Tekla Healthcare 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 Nuveen Preferred and Tekla Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nuveen Preferred and and Tekla Healthcare Opportunities, you can compare the effects of market volatilities on Nuveen Preferred and Tekla Healthcare 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 Nuveen Preferred with a short position of Tekla Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nuveen Preferred and Tekla Healthcare.
Diversification Opportunities for Nuveen Preferred and Tekla Healthcare
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nuveen and Tekla is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Nuveen Preferred and and Tekla Healthcare Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekla Healthcare Opp and Nuveen Preferred 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 Nuveen Preferred and are associated (or correlated) with Tekla Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tekla Healthcare Opp has no effect on the direction of Nuveen Preferred i.e., Nuveen Preferred and Tekla Healthcare go up and down completely randomly.
Pair Corralation between Nuveen Preferred and Tekla Healthcare
Considering the 90-day investment horizon Nuveen Preferred is expected to generate 1.35 times less return on investment than Tekla Healthcare. But when comparing it to its historical volatility, Nuveen Preferred and is 1.87 times less risky than Tekla Healthcare. It trades about 0.14 of its potential returns per unit of risk. Tekla Healthcare Opportunities is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,664 in Tekla Healthcare Opportunities on August 28, 2024 and sell it today you would earn a total of 366.00 from holding Tekla Healthcare Opportunities or generate 22.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.52% |
| Values | Daily Returns |
Nuveen Preferred and vs. Tekla Healthcare Opportunities
Performance |
| Timeline |
| Nuveen Preferred |
| Tekla Healthcare Opp |
Nuveen Preferred and Tekla Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nuveen Preferred and Tekla Healthcare
The main advantage of trading using opposite Nuveen Preferred and Tekla Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nuveen Preferred position performs unexpectedly, Tekla Healthcare 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 Tekla Healthcare will offset losses from the drop in Tekla Healthcare's long position.The idea behind Nuveen Preferred and and Tekla Healthcare Opportunities pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Tekla Healthcare vs. Tekla Healthcare Investors | Tekla Healthcare vs. Tekla Life Sciences | Tekla Healthcare vs. Cohen Steers Reit | Tekla Healthcare vs. XAI Octagon Floating |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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