Correlation Between Tekla Healthcare and Amer Beacon
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Amer Beacon 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 Amer Beacon 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 Amer Beacon Ark, you can compare the effects of market volatilities on Tekla Healthcare and Amer Beacon 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 Amer Beacon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Amer Beacon.
Diversification Opportunities for Tekla Healthcare and Amer Beacon
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tekla and Amer is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and Amer Beacon Ark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amer Beacon Ark 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 Amer Beacon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amer Beacon Ark has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Amer Beacon go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Amer Beacon
Considering the 90-day investment horizon Tekla Healthcare Opportunities is expected to generate 0.45 times more return on investment than Amer Beacon. However, Tekla Healthcare Opportunities is 2.22 times less risky than Amer Beacon. It trades about 0.07 of its potential returns per unit of risk. Amer Beacon Ark is currently generating about 0.03 per unit of risk. If you would invest 1,802 in Tekla Healthcare Opportunities on December 4, 2024 and sell it today you would earn a total of 306.00 from holding Tekla Healthcare Opportunities or generate 16.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tekla Healthcare Opportunities vs. Amer Beacon Ark
Performance |
| Timeline |
| Tekla Healthcare Opp |
| Amer Beacon Ark |
Tekla Healthcare and Amer Beacon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and Amer Beacon
The main advantage of trading using opposite Tekla Healthcare and Amer Beacon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Amer Beacon 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 Amer Beacon will offset losses from the drop in Amer Beacon'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 |
| Amer Beacon vs. Catholic Responsible Investments | Amer Beacon vs. Alpine Ultra Short | Amer Beacon vs. Angel Oak Ultrashort | Amer Beacon vs. Siit Ultra Short |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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