Correlation Between DWS Municipal and Tekla World
Can any of the company-specific risk be diversified away by investing in both DWS Municipal and Tekla World 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 World 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 World Healthcare, you can compare the effects of market volatilities on DWS Municipal and Tekla World 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 World. Check out your portfolio center. Please also check ongoing floating volatility patterns of DWS Municipal and Tekla World.
Diversification Opportunities for DWS Municipal and Tekla World
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between DWS and Tekla is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding DWS Municipal Income and Tekla World Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekla World Healthcare 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 World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tekla World Healthcare has no effect on the direction of DWS Municipal i.e., DWS Municipal and Tekla World go up and down completely randomly.
Pair Corralation between DWS Municipal and Tekla World
Considering the 90-day investment horizon DWS Municipal Income is expected to generate 0.55 times more return on investment than Tekla World. However, DWS Municipal Income is 1.82 times less risky than Tekla World. It trades about 0.21 of its potential returns per unit of risk. Tekla World Healthcare is currently generating about -0.17 per unit of risk. If you would invest 965.00 in DWS Municipal Income on August 28, 2024 and sell it today you would earn a total of 27.00 from holding DWS Municipal Income or generate 2.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DWS Municipal Income vs. Tekla World Healthcare
Performance |
| Timeline |
| DWS Municipal Income |
| Tekla World Healthcare |
DWS Municipal and Tekla World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DWS Municipal and Tekla World
The main advantage of trading using opposite DWS Municipal and Tekla World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DWS Municipal position performs unexpectedly, Tekla World 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 World will offset losses from the drop in Tekla World's long position.| DWS Municipal vs. PowerUp Acquisition Corp | DWS Municipal vs. Aurora Innovation | DWS Municipal vs. HUMANA INC | DWS Municipal vs. Aquagold International |
| Tekla World vs. Tekla Healthcare Investors | Tekla World vs. Tekla Life Sciences | Tekla World vs. Flaherty and Crumrine | Tekla World vs. Cohen And Steers |
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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