Correlation Between Live Oak and Tekla Healthcare
Can any of the company-specific risk be diversified away by investing in both Live Oak 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 Live Oak and Tekla Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Live Oak Health and Tekla Healthcare Opportunities, you can compare the effects of market volatilities on Live Oak 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 Live Oak with a short position of Tekla Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Live Oak and Tekla Healthcare.
Diversification Opportunities for Live Oak and Tekla Healthcare
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between LIVE and Tekla is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Live Oak Health 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 Live Oak 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 Live Oak Health 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 Live Oak i.e., Live Oak and Tekla Healthcare go up and down completely randomly.
Pair Corralation between Live Oak and Tekla Healthcare
Assuming the 90 days horizon Live Oak Health is expected to generate 0.68 times more return on investment than Tekla Healthcare. However, Live Oak Health is 1.48 times less risky than Tekla Healthcare. It trades about 0.08 of its potential returns per unit of risk. Tekla Healthcare Opportunities is currently generating about -0.11 per unit of risk. If you would invest 2,166 in Live Oak Health on August 27, 2024 and sell it today you would earn a total of 32.00 from holding Live Oak Health or generate 1.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Live Oak Health vs. Tekla Healthcare Opportunities
Performance |
| Timeline |
| Live Oak Health |
| Tekla Healthcare Opp |
Live Oak and Tekla Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Live Oak and Tekla Healthcare
The main advantage of trading using opposite Live Oak and Tekla Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Live Oak 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.| Live Oak vs. Black Oak Emerging | Live Oak vs. Pin Oak Equity | Live Oak vs. Red Oak Technology | Live Oak vs. White Oak Select |
| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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