Correlation Between Tekla Healthcare and World Energy
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and World Energy 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 World Energy 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 World Energy Fund, you can compare the effects of market volatilities on Tekla Healthcare and World Energy 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 World Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and World Energy.
Diversification Opportunities for Tekla Healthcare and World Energy
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tekla and World is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and World Energy Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on World Energy 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 World Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of World Energy has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and World Energy go up and down completely randomly.
Pair Corralation between Tekla Healthcare and World Energy
Considering the 90-day investment horizon Tekla Healthcare Opportunities is expected to under-perform the World Energy. But the fund apears to be less risky and, when comparing its historical volatility, Tekla Healthcare Opportunities is 1.06 times less risky than World Energy. The fund trades about -0.02 of its potential returns per unit of risk. The World Energy Fund is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 1,306 in World Energy Fund on September 3, 2024 and sell it today you would earn a total of 219.00 from holding World Energy Fund or generate 16.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tekla Healthcare Opportunities vs. World Energy Fund
Performance |
| Timeline |
| Tekla Healthcare Opp |
| World Energy |
Tekla Healthcare and World Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and World Energy
The main advantage of trading using opposite Tekla Healthcare and World Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, World Energy 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 World Energy will offset losses from the drop in World Energy'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 |
| World Energy vs. Health Biotchnology Portfolio | World Energy vs. Tekla Healthcare Opportunities | World Energy vs. Baillie Gifford Health | World Energy vs. Eventide Healthcare Life |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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