Correlation Between Tekla Healthcare and American Mutual
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and American Mutual 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 American Mutual 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 American Mutual Fund, you can compare the effects of market volatilities on Tekla Healthcare and American Mutual 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 American Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and American Mutual.
Diversification Opportunities for Tekla Healthcare and American Mutual
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Tekla and American is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and American Mutual Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Mutual 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 American Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Mutual has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and American Mutual go up and down completely randomly.
Pair Corralation between Tekla Healthcare and American Mutual
Considering the 90-day investment horizon Tekla Healthcare is expected to generate 1.56 times less return on investment than American Mutual. In addition to that, Tekla Healthcare is 1.48 times more volatile than American Mutual Fund. It trades about 0.04 of its total potential returns per unit of risk. American Mutual Fund is currently generating about 0.09 per unit of volatility. If you would invest 4,631 in American Mutual Fund on August 27, 2024 and sell it today you would earn a total of 1,364 from holding American Mutual Fund or generate 29.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tekla Healthcare Opportunities vs. American Mutual Fund
Performance |
| Timeline |
| Tekla Healthcare Opp |
| American Mutual |
Tekla Healthcare and American Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and American Mutual
The main advantage of trading using opposite Tekla Healthcare and American Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, American Mutual 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 American Mutual will offset losses from the drop in American Mutual'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 |
| American Mutual vs. Alphacentric Lifesci Healthcare | American Mutual vs. Hartford Healthcare Hls | American Mutual vs. Tekla Healthcare Opportunities | American Mutual vs. Allianzgi Health Sciences |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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