Correlation Between Tekla Healthcare and American Century
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and American Century 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 Century 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 Century California, you can compare the effects of market volatilities on Tekla Healthcare and American Century 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 Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and American Century.
Diversification Opportunities for Tekla Healthcare and American Century
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tekla and American is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and American Century California in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century Cal 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 Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Century Cal has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and American Century go up and down completely randomly.
Pair Corralation between Tekla Healthcare and American Century
Considering the 90-day investment horizon Tekla Healthcare Opportunities is expected to generate 2.15 times more return on investment than American Century. However, Tekla Healthcare is 2.15 times more volatile than American Century California. It trades about 0.04 of its potential returns per unit of risk. American Century California is currently generating about 0.03 per unit of risk. If you would invest 1,675 in Tekla Healthcare Opportunities on September 13, 2024 and sell it today you would earn a total of 284.00 from holding Tekla Healthcare Opportunities or generate 16.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.2% |
| Values | Daily Returns |
Tekla Healthcare Opportunities vs. American Century California
Performance |
| Timeline |
| Tekla Healthcare Opp |
| American Century Cal |
Tekla Healthcare and American Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and American Century
The main advantage of trading using opposite Tekla Healthcare and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, American Century 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 Century will offset losses from the drop in American Century'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 Century vs. Versatile Bond Portfolio | American Century vs. California Bond Fund | American Century vs. Morningstar Defensive Bond | American Century vs. T Rowe Price |
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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