Correlation Between Tekla Healthcare and Limited Duration
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Limited Duration 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 Limited Duration 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 Limited Duration Fund, you can compare the effects of market volatilities on Tekla Healthcare and Limited Duration 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 Limited Duration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Limited Duration.
Diversification Opportunities for Tekla Healthcare and Limited Duration
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tekla and LIMITED is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and Limited Duration Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Limited Duration 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 Limited Duration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Limited Duration has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Limited Duration go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Limited Duration
Considering the 90-day investment horizon Tekla Healthcare Opportunities is expected to under-perform the Limited Duration. In addition to that, Tekla Healthcare is 8.68 times more volatile than Limited Duration Fund. It trades about -0.1 of its total potential returns per unit of risk. Limited Duration Fund is currently generating about -0.11 per unit of volatility. If you would invest 931.00 in Limited Duration Fund on August 28, 2024 and sell it today you would lose (6.00) from holding Limited Duration Fund or give up 0.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tekla Healthcare Opportunities vs. Limited Duration Fund
Performance |
| Timeline |
| Tekla Healthcare Opp |
| Limited Duration |
Tekla Healthcare and Limited Duration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and Limited Duration
The main advantage of trading using opposite Tekla Healthcare and Limited Duration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Limited Duration 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 Limited Duration will offset losses from the drop in Limited Duration'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 |
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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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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