Correlation Between Tekla Healthcare and Abbey Capital
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Abbey Capital 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 Tekla Healthcare and Abbey Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tekla Healthcare Opportunities and Abbey Capital Futures, you can compare the effects of market volatilities on Tekla Healthcare and Abbey Capital 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 Tekla Healthcare with a short position of Abbey Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Abbey Capital.
Diversification Opportunities for Tekla Healthcare and Abbey Capital
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Tekla and Abbey is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and Abbey Capital Futures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Abbey Capital Futures and Tekla Healthcare 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 Tekla Healthcare Opportunities are associated (or correlated) with Abbey Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Abbey Capital Futures has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Abbey Capital go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Abbey Capital
Considering the 90-day investment horizon Tekla Healthcare Opportunities is expected to under-perform the Abbey Capital. In addition to that, Tekla Healthcare is 2.68 times more volatile than Abbey Capital Futures. It trades about -0.05 of its total potential returns per unit of risk. Abbey Capital Futures is currently generating about -0.02 per unit of volatility. If you would invest 1,051 in Abbey Capital Futures on September 3, 2024 and sell it today you would lose (5.00) from holding Abbey Capital Futures or give up 0.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tekla Healthcare Opportunities vs. Abbey Capital Futures
Performance |
| Timeline |
| Tekla Healthcare Opp |
| Abbey Capital Futures |
Tekla Healthcare and Abbey Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and Abbey Capital
The main advantage of trading using opposite Tekla Healthcare and Abbey Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Abbey Capital 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 Abbey Capital will offset losses from the drop in Abbey Capital's long position.| Tekla Healthcare vs. Tekla Healthcare Investors | Tekla Healthcare vs. Tekla Life Sciences | Tekla Healthcare vs. Cohen Steers Reit | Tekla Healthcare vs. XAI Octagon Floating |
| Abbey Capital vs. Aqr Managed Futures | Abbey Capital vs. Pimco Trends Managed | Abbey Capital vs. Pimco Trends Managed | Abbey Capital vs. American Beacon Ahl |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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