Correlation Between Transamerica Asset and Tekla Healthcare
Can any of the company-specific risk be diversified away by investing in both Transamerica Asset 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 Transamerica Asset and Tekla Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transamerica Asset Allocation and Tekla Healthcare Opportunities, you can compare the effects of market volatilities on Transamerica Asset 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 Transamerica Asset with a short position of Tekla Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transamerica Asset and Tekla Healthcare.
Diversification Opportunities for Transamerica Asset and Tekla Healthcare
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Transamerica and Tekla is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Transamerica Asset Allocation 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 Transamerica Asset 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 Transamerica Asset Allocation 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 Transamerica Asset i.e., Transamerica Asset and Tekla Healthcare go up and down completely randomly.
Pair Corralation between Transamerica Asset and Tekla Healthcare
Assuming the 90 days horizon Transamerica Asset is expected to generate 1.01 times less return on investment than Tekla Healthcare. But when comparing it to its historical volatility, Transamerica Asset Allocation is 1.91 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 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,660 in Tekla Healthcare Opportunities on September 12, 2024 and sell it today you would earn a total of 343.00 from holding Tekla Healthcare Opportunities or generate 20.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transamerica Asset Allocation vs. Tekla Healthcare Opportunities
Performance |
| Timeline |
| Transamerica Asset |
| Tekla Healthcare Opp |
Transamerica Asset and Tekla Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transamerica Asset and Tekla Healthcare
The main advantage of trading using opposite Transamerica Asset and Tekla Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transamerica Asset 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.| Transamerica Asset vs. Tekla Healthcare Opportunities | Transamerica Asset vs. Lord Abbett Health | Transamerica Asset vs. Alphacentric Lifesci Healthcare | Transamerica Asset vs. Prudential Health Sciences |
| Tekla Healthcare vs. Tekla Healthcare Investors | Tekla Healthcare vs. Tekla Life Sciences | Tekla Healthcare vs. Cohen Steers Reit | Tekla Healthcare vs. XAI Octagon Floating |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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