Correlation Between Tekla Healthcare and Goldman Sachs
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Goldman Sachs 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 Goldman Sachs 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 Goldman Sachs Small, you can compare the effects of market volatilities on Tekla Healthcare and Goldman Sachs 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 Goldman Sachs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Goldman Sachs.
Diversification Opportunities for Tekla Healthcare and Goldman Sachs
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tekla and Goldman is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and Goldman Sachs Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Small has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Goldman Sachs go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Goldman Sachs
Considering the 90-day investment horizon Tekla Healthcare Opportunities is expected to under-perform the Goldman Sachs. But the fund apears to be less risky and, when comparing its historical volatility, Tekla Healthcare Opportunities is 1.25 times less risky than Goldman Sachs. The fund trades about -0.06 of its potential returns per unit of risk. The Goldman Sachs Small is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 2,846 in Goldman Sachs Small on August 29, 2024 and sell it today you would earn a total of 235.00 from holding Goldman Sachs Small or generate 8.26% 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. Goldman Sachs Small
Performance |
| Timeline |
| Tekla Healthcare Opp |
| Goldman Sachs Small |
Tekla Healthcare and Goldman Sachs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and Goldman Sachs
The main advantage of trading using opposite Tekla Healthcare and Goldman Sachs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Goldman Sachs 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 Goldman Sachs will offset losses from the drop in Goldman Sachs' long position.| Tekla Healthcare vs. Gabelli Global Small | Tekla Healthcare vs. MFS Investment Grade | Tekla Healthcare vs. Eaton Vance National | Tekla Healthcare vs. GAMCO Natural Resources |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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