Correlation Between DWS Municipal and Tekla Life
Can any of the company-specific risk be diversified away by investing in both DWS Municipal and Tekla Life 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 DWS Municipal and Tekla Life into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DWS Municipal Income and Tekla Life Sciences, you can compare the effects of market volatilities on DWS Municipal and Tekla Life 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 DWS Municipal with a short position of Tekla Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of DWS Municipal and Tekla Life.
Diversification Opportunities for DWS Municipal and Tekla Life
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DWS and Tekla is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding DWS Municipal Income and Tekla Life Sciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekla Life Sciences and DWS Municipal 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 DWS Municipal Income are associated (or correlated) with Tekla Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tekla Life Sciences has no effect on the direction of DWS Municipal i.e., DWS Municipal and Tekla Life go up and down completely randomly.
Pair Corralation between DWS Municipal and Tekla Life
Considering the 90-day investment horizon DWS Municipal is expected to generate 1.55 times less return on investment than Tekla Life. But when comparing it to its historical volatility, DWS Municipal Income is 2.43 times less risky than Tekla Life. It trades about 0.05 of its potential returns per unit of risk. Tekla Life Sciences is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,161 in Tekla Life Sciences on November 1, 2024 and sell it today you would earn a total of 252.00 from holding Tekla Life Sciences or generate 21.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DWS Municipal Income vs. Tekla Life Sciences
Performance |
| Timeline |
| DWS Municipal Income |
| Tekla Life Sciences |
DWS Municipal and Tekla Life Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DWS Municipal and Tekla Life
The main advantage of trading using opposite DWS Municipal and Tekla Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DWS Municipal position performs unexpectedly, Tekla Life 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 Life will offset losses from the drop in Tekla Life's long position.| DWS Municipal vs. Blue Owl Capital | DWS Municipal vs. TPG Inc | DWS Municipal vs. Patria Investments | DWS Municipal vs. Cion Investment Corp |
| Tekla Life vs. Tekla World Healthcare | Tekla Life vs. Tekla Healthcare Opportunities | Tekla Life vs. Royce Value Closed | Tekla Life vs. John Hancock Financial |
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.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |