Correlation Between Tekla Healthcare and Flaherty Crumrine
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Flaherty Crumrine 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 Flaherty Crumrine 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 Flaherty Crumrine Total, you can compare the effects of market volatilities on Tekla Healthcare and Flaherty Crumrine 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 Flaherty Crumrine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Flaherty Crumrine.
Diversification Opportunities for Tekla Healthcare and Flaherty Crumrine
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tekla and Flaherty is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and Flaherty Crumrine Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flaherty Crumrine Total 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 Flaherty Crumrine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flaherty Crumrine Total has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Flaherty Crumrine go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Flaherty Crumrine
Considering the 90-day investment horizon Tekla Healthcare is expected to generate 1.21 times less return on investment than Flaherty Crumrine. In addition to that, Tekla Healthcare is 1.76 times more volatile than Flaherty Crumrine Total. It trades about 0.07 of its total potential returns per unit of risk. Flaherty Crumrine Total is currently generating about 0.15 per unit of volatility. If you would invest 1,497 in Flaherty Crumrine Total on September 1, 2024 and sell it today you would earn a total of 175.00 from holding Flaherty Crumrine Total or generate 11.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tekla Healthcare Opportunities vs. Flaherty Crumrine Total
Performance |
| Timeline |
| Tekla Healthcare Opp |
| Flaherty Crumrine Total |
Tekla Healthcare and Flaherty Crumrine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and Flaherty Crumrine
The main advantage of trading using opposite Tekla Healthcare and Flaherty Crumrine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Flaherty Crumrine 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 Flaherty Crumrine will offset losses from the drop in Flaherty Crumrine'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 |
| Flaherty Crumrine vs. Flaherty Crumrine Preferredome | Flaherty Crumrine vs. John Hancock Preferred | Flaherty Crumrine vs. Eagle Capital Growth | Flaherty Crumrine vs. John Hancock Preferred |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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