Correlation Between NYSE Composite and Tekla Healthcare
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Tekla Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Tekla Healthcare Investors, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Tekla Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Tekla Healthcare.
Diversification Opportunities for NYSE Composite and Tekla Healthcare
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between NYSE and Tekla is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Tekla Healthcare go up and down completely randomly.
Pair Corralation between NYSE Composite and Tekla Healthcare
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.85 times more return on investment than Tekla Healthcare. However, NYSE Composite is 1.18 times less risky than Tekla Healthcare. It trades about 0.08 of its potential returns per unit of risk. Tekla Healthcare Investors is currently generating about -0.01 per unit of risk. If you would invest 1,521,826 in NYSE Composite on September 14, 2024 and sell it today you would earn a total of 455,083 from holding NYSE Composite or generate 29.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Tekla Healthcare Investors
Performance |
| Timeline |
NYSE Composite and Tekla Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Tekla Healthcare Investors
Pair trading matchups for Tekla Healthcare
Pair Trading with NYSE Composite and Tekla Healthcare
The main advantage of trading using opposite NYSE Composite and Tekla Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Air Products and | NYSE Composite vs. Allient | NYSE Composite vs. Ecovyst | NYSE Composite vs. CTS Corporation |
| Tekla Healthcare vs. Calvert Developed Market | Tekla Healthcare vs. Siit Emerging Markets | Tekla Healthcare vs. Pnc Emerging Markets | Tekla Healthcare vs. Investec Emerging Markets |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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