Correlation Between Payden Absolute and Tekla Healthcare
Can any of the company-specific risk be diversified away by investing in both Payden Absolute 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 Payden Absolute and Tekla Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Payden Absolute Return and Tekla Healthcare Opportunities, you can compare the effects of market volatilities on Payden Absolute 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 Payden Absolute with a short position of Tekla Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Payden Absolute and Tekla Healthcare.
Diversification Opportunities for Payden Absolute and Tekla Healthcare
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Payden and Tekla is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Payden Absolute Return 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 Payden Absolute 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 Payden Absolute Return 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 Payden Absolute i.e., Payden Absolute and Tekla Healthcare go up and down completely randomly.
Pair Corralation between Payden Absolute and Tekla Healthcare
Assuming the 90 days horizon Payden Absolute Return is expected to generate 0.14 times more return on investment than Tekla Healthcare. However, Payden Absolute Return is 7.36 times less risky than Tekla Healthcare. It trades about -0.12 of its potential returns per unit of risk. Tekla Healthcare Opportunities is currently generating about -0.04 per unit of risk. If you would invest 951.00 in Payden Absolute Return on August 31, 2024 and sell it today you would lose (5.00) from holding Payden Absolute Return or give up 0.53% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Payden Absolute Return vs. Tekla Healthcare Opportunities
Performance |
| Timeline |
| Payden Absolute Return |
| Tekla Healthcare Opp |
Payden Absolute and Tekla Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Payden Absolute and Tekla Healthcare
The main advantage of trading using opposite Payden Absolute and Tekla Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Payden Absolute 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.| Payden Absolute vs. Aqr Diversified Arbitrage | Payden Absolute vs. T Rowe Price | Payden Absolute vs. Principal Lifetime Hybrid | Payden Absolute vs. Oppenheimer International Diversified |
| Tekla Healthcare vs. MFS Investment Grade | Tekla Healthcare vs. Eaton Vance Municipal | Tekla Healthcare vs. DTF Tax Free | Tekla Healthcare vs. HUMANA INC |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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