Correlation Between Tekla Healthcare and Sterling Capital
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Sterling Capital 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 Sterling Capital 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 Sterling Capital Special, you can compare the effects of market volatilities on Tekla Healthcare and Sterling Capital 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 Sterling Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Sterling Capital.
Diversification Opportunities for Tekla Healthcare and Sterling Capital
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tekla and Sterling is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and Sterling Capital Special in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sterling Capital Special 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 Sterling Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sterling Capital Special has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Sterling Capital go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Sterling Capital
Considering the 90-day investment horizon Tekla Healthcare Opportunities is expected to generate 0.8 times more return on investment than Sterling Capital. However, Tekla Healthcare Opportunities is 1.25 times less risky than Sterling Capital. It trades about 0.05 of its potential returns per unit of risk. Sterling Capital Special is currently generating about 0.04 per unit of risk. If you would invest 1,688 in Tekla Healthcare Opportunities on September 3, 2024 and sell it today you would earn a total of 386.00 from holding Tekla Healthcare Opportunities or generate 22.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tekla Healthcare Opportunities vs. Sterling Capital Special
Performance |
| Timeline |
| Tekla Healthcare Opp |
| Sterling Capital Special |
Tekla Healthcare and Sterling Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and Sterling Capital
The main advantage of trading using opposite Tekla Healthcare and Sterling Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Sterling Capital 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 Sterling Capital will offset losses from the drop in Sterling Capital'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 |
| Sterling Capital vs. The National Tax Free | Sterling Capital vs. Artisan High Income | Sterling Capital vs. Maryland Tax Free Bond | Sterling Capital vs. Ambrus Core Bond |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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