Correlation Between Tekla Healthcare and Quantitative
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Quantitative 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 Quantitative 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 Quantitative U S, you can compare the effects of market volatilities on Tekla Healthcare and Quantitative 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 Quantitative. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Quantitative.
Diversification Opportunities for Tekla Healthcare and Quantitative
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tekla and Quantitative is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and Quantitative U S in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Quantitative U S 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 Quantitative. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Quantitative U S has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Quantitative go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Quantitative
Considering the 90-day investment horizon Tekla Healthcare Opportunities is expected to under-perform the Quantitative. But the fund apears to be less risky and, when comparing its historical volatility, Tekla Healthcare Opportunities is 1.23 times less risky than Quantitative. The fund trades about -0.02 of its potential returns per unit of risk. The Quantitative U S is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 1,546 in Quantitative U S on September 2, 2024 and sell it today you would earn a total of 132.00 from holding Quantitative U S or generate 8.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tekla Healthcare Opportunities vs. Quantitative U S
Performance |
| Timeline |
| Tekla Healthcare Opp |
| Quantitative U S |
Tekla Healthcare and Quantitative Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and Quantitative
The main advantage of trading using opposite Tekla Healthcare and Quantitative positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Quantitative 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 Quantitative will offset losses from the drop in Quantitative'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 |
| Quantitative vs. Large Cap Growth | Quantitative vs. Lazard International Strategic | Quantitative vs. Equity Income Fund | Quantitative vs. Large Cap E |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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