Correlation Between Mastercard and Tekla Healthcare
Can any of the company-specific risk be diversified away by investing in both Mastercard 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 Mastercard and Tekla Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mastercard and Tekla Healthcare Investors, you can compare the effects of market volatilities on Mastercard 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 Mastercard with a short position of Tekla Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mastercard and Tekla Healthcare.
Diversification Opportunities for Mastercard and Tekla Healthcare
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mastercard and Tekla is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Mastercard and Tekla Healthcare Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekla Healthcare Inv and Mastercard 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 Mastercard 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 Inv has no effect on the direction of Mastercard i.e., Mastercard and Tekla Healthcare go up and down completely randomly.
Pair Corralation between Mastercard and Tekla Healthcare
Allowing for the 90-day total investment horizon Mastercard is expected to generate 0.94 times more return on investment than Tekla Healthcare. However, Mastercard is 1.07 times less risky than Tekla Healthcare. It trades about 0.14 of its potential returns per unit of risk. Tekla Healthcare Investors is currently generating about -0.16 per unit of risk. If you would invest 50,821 in Mastercard on August 28, 2024 and sell it today you would earn a total of 1,839 from holding Mastercard or generate 3.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mastercard vs. Tekla Healthcare Investors
Performance |
| Timeline |
| Mastercard |
| Tekla Healthcare Inv |
Mastercard and Tekla Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mastercard and Tekla Healthcare
The main advantage of trading using opposite Mastercard and Tekla Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mastercard 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.| Mastercard vs. American Express | Mastercard vs. Morningstar Unconstrained Allocation | Mastercard vs. Sitka Gold Corp | Mastercard vs. MSCI ACWI exAUCONSUMER |
| Tekla Healthcare vs. Tekla Healthcare Opportunities | Tekla Healthcare vs. Eaton Vance Tax | Tekla Healthcare vs. Tekla World Healthcare | Tekla Healthcare vs. Cohen Steers Limited |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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