Correlation Between Tekla Healthcare and Ep Emerging
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Ep Emerging 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 Ep Emerging 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 Ep Emerging Markets, you can compare the effects of market volatilities on Tekla Healthcare and Ep Emerging 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 Ep Emerging. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Ep Emerging.
Diversification Opportunities for Tekla Healthcare and Ep Emerging
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tekla and EPEIX is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and Ep Emerging Markets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ep Emerging Markets 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 Ep Emerging. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ep Emerging Markets has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Ep Emerging go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Ep Emerging
Considering the 90-day investment horizon Tekla Healthcare Opportunities is expected to under-perform the Ep Emerging. In addition to that, Tekla Healthcare is 1.95 times more volatile than Ep Emerging Markets. It trades about -0.17 of its total potential returns per unit of risk. Ep Emerging Markets is currently generating about -0.05 per unit of volatility. If you would invest 1,037 in Ep Emerging Markets on September 13, 2024 and sell it today you would lose (10.00) from holding Ep Emerging Markets or give up 0.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tekla Healthcare Opportunities vs. Ep Emerging Markets
Performance |
| Timeline |
| Tekla Healthcare Opp |
| Ep Emerging Markets |
Tekla Healthcare and Ep Emerging Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and Ep Emerging
The main advantage of trading using opposite Tekla Healthcare and Ep Emerging positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Ep Emerging 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 Ep Emerging will offset losses from the drop in Ep Emerging'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 |
| Ep Emerging vs. Oaktree Diversifiedome | Ep Emerging vs. Sentinel Small Pany | Ep Emerging vs. Davenport Small Cap | Ep Emerging vs. Fidelity Advisor Diversified |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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