Correlation Between Qudian and Tekla Healthcare
Can any of the company-specific risk be diversified away by investing in both Qudian 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 Qudian and Tekla Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qudian Inc and Tekla Healthcare Investors, you can compare the effects of market volatilities on Qudian 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 Qudian with a short position of Tekla Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qudian and Tekla Healthcare.
Diversification Opportunities for Qudian and Tekla Healthcare
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Qudian and Tekla is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Qudian Inc 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 Qudian 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 Qudian Inc 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 Qudian i.e., Qudian and Tekla Healthcare go up and down completely randomly.
Pair Corralation between Qudian and Tekla Healthcare
Allowing for the 90-day total investment horizon Qudian Inc is expected to under-perform the Tekla Healthcare. In addition to that, Qudian is 1.95 times more volatile than Tekla Healthcare Investors. It trades about -0.11 of its total potential returns per unit of risk. Tekla Healthcare Investors is currently generating about -0.16 per unit of volatility. If you would invest 1,823 in Tekla Healthcare Investors on August 28, 2024 and sell it today you would lose (85.00) from holding Tekla Healthcare Investors or give up 4.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Qudian Inc vs. Tekla Healthcare Investors
Performance |
| Timeline |
| Qudian Inc |
| Tekla Healthcare Inv |
Qudian and Tekla Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qudian and Tekla Healthcare
The main advantage of trading using opposite Qudian and Tekla Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qudian 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.The idea behind Qudian Inc and Tekla Healthcare Investors pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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