Correlation Between Mainstay Definedterm and Tekla Healthcare
Can any of the company-specific risk be diversified away by investing in both Mainstay Definedterm 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 Mainstay Definedterm and Tekla Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mainstay Definedterm Muncipal and Tekla Healthcare Investors, you can compare the effects of market volatilities on Mainstay Definedterm 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 Mainstay Definedterm with a short position of Tekla Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mainstay Definedterm and Tekla Healthcare.
Diversification Opportunities for Mainstay Definedterm and Tekla Healthcare
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Mainstay and Tekla is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Mainstay Definedterm Muncipal 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 Mainstay Definedterm 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 Mainstay Definedterm Muncipal 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 Mainstay Definedterm i.e., Mainstay Definedterm and Tekla Healthcare go up and down completely randomly.
Pair Corralation between Mainstay Definedterm and Tekla Healthcare
Considering the 90-day investment horizon Mainstay Definedterm Muncipal is expected to generate 0.7 times more return on investment than Tekla Healthcare. However, Mainstay Definedterm Muncipal is 1.43 times less risky than Tekla Healthcare. It trades about 0.1 of its potential returns per unit of risk. Tekla Healthcare Investors is currently generating about -0.07 per unit of risk. If you would invest 1,538 in Mainstay Definedterm Muncipal on December 1, 2024 and sell it today you would earn a total of 23.00 from holding Mainstay Definedterm Muncipal or generate 1.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Mainstay Definedterm Muncipal vs. Tekla Healthcare Investors
Performance |
| Timeline |
| Mainstay Definedterm |
| Tekla Healthcare Inv |
Mainstay Definedterm and Tekla Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mainstay Definedterm and Tekla Healthcare
The main advantage of trading using opposite Mainstay Definedterm and Tekla Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mainstay Definedterm 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.| Mainstay Definedterm vs. Blackrock Muniholdings Closed | Mainstay Definedterm vs. DTF Tax Free | Mainstay Definedterm vs. John Hancock Income | Mainstay Definedterm vs. MFS Investment Grade |
| 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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