Correlation Between Tekla Healthcare and Federated Kaufmann
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Federated Kaufmann 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 Federated Kaufmann 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 Federated Kaufmann Small, you can compare the effects of market volatilities on Tekla Healthcare and Federated Kaufmann 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 Federated Kaufmann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Federated Kaufmann.
Diversification Opportunities for Tekla Healthcare and Federated Kaufmann
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tekla and Federated is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and Federated Kaufmann Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Kaufmann Small 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 Federated Kaufmann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Kaufmann Small has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Federated Kaufmann go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Federated Kaufmann
Considering the 90-day investment horizon Tekla Healthcare is expected to generate 8.32 times less return on investment than Federated Kaufmann. In addition to that, Tekla Healthcare is 1.3 times more volatile than Federated Kaufmann Small. It trades about 0.03 of its total potential returns per unit of risk. Federated Kaufmann Small is currently generating about 0.32 per unit of volatility. If you would invest 5,183 in Federated Kaufmann Small on September 1, 2024 and sell it today you would earn a total of 441.00 from holding Federated Kaufmann Small or generate 8.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Tekla Healthcare Opportunities vs. Federated Kaufmann Small
Performance |
| Timeline |
| Tekla Healthcare Opp |
| Federated Kaufmann Small |
Tekla Healthcare and Federated Kaufmann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and Federated Kaufmann
The main advantage of trading using opposite Tekla Healthcare and Federated Kaufmann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Federated Kaufmann 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 Federated Kaufmann will offset losses from the drop in Federated Kaufmann'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 |
| Federated Kaufmann vs. Federated Emerging Market | Federated Kaufmann vs. Federated Mdt All | Federated Kaufmann vs. Federated Mdt Balanced | Federated Kaufmann vs. Federated Global Allocation |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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