Correlation Between Tekla Healthcare and Aberden Emerng
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Aberden Emerng 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 Aberden Emerng 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 Aberden Emerng Mrkts, you can compare the effects of market volatilities on Tekla Healthcare and Aberden Emerng 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 Aberden Emerng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Aberden Emerng.
Diversification Opportunities for Tekla Healthcare and Aberden Emerng
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tekla and Aberden is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and Aberden Emerng Mrkts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aberden Emerng Mrkts 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 Aberden Emerng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aberden Emerng Mrkts has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Aberden Emerng go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Aberden Emerng
Considering the 90-day investment horizon Tekla Healthcare Opportunities is expected to generate 1.01 times more return on investment than Aberden Emerng. However, Tekla Healthcare is 1.01 times more volatile than Aberden Emerng Mrkts. It trades about 0.07 of its potential returns per unit of risk. Aberden Emerng Mrkts is currently generating about 0.02 per unit of risk. If you would invest 1,915 in Tekla Healthcare Opportunities on September 1, 2024 and sell it today you would earn a total of 173.00 from holding Tekla Healthcare Opportunities or generate 9.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.21% |
| Values | Daily Returns |
Tekla Healthcare Opportunities vs. Aberden Emerng Mrkts
Performance |
| Timeline |
| Tekla Healthcare Opp |
| Aberden Emerng Mrkts |
Tekla Healthcare and Aberden Emerng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and Aberden Emerng
The main advantage of trading using opposite Tekla Healthcare and Aberden Emerng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Aberden Emerng 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 Aberden Emerng will offset losses from the drop in Aberden Emerng'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 |
| Aberden Emerng vs. Fidelity Advisor 529 | Aberden Emerng vs. American Funds Inflation | Aberden Emerng vs. Nationwide Inflation Protected Securities | Aberden Emerng vs. Ab Bond Inflation |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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