Correlation Between Tekla Healthcare and City National
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and City National 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 City National 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 City National Rochdale, you can compare the effects of market volatilities on Tekla Healthcare and City National 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 City National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and City National.
Diversification Opportunities for Tekla Healthcare and City National
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tekla and City is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and City National Rochdale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City National Rochdale 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 City National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City National Rochdale has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and City National go up and down completely randomly.
Pair Corralation between Tekla Healthcare and City National
If you would invest 983.00 in City National Rochdale on September 14, 2024 and sell it today you would earn a total of 0.00 from holding City National Rochdale or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Tekla Healthcare Opportunities vs. City National Rochdale
Performance |
| Timeline |
| Tekla Healthcare Opp |
| City National Rochdale |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Tekla Healthcare and City National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and City National
The main advantage of trading using opposite Tekla Healthcare and City National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, City National 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 City National will offset losses from the drop in City National'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 |
| City National vs. Allianzgi Health Sciences | City National vs. Tekla Healthcare Opportunities | City National vs. Highland Longshort Healthcare | City National vs. Blackrock 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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