Correlation Between Tekla Healthcare and Hennessy Technology
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Hennessy Technology 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 Hennessy Technology 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 Hennessy Technology Fund, you can compare the effects of market volatilities on Tekla Healthcare and Hennessy Technology 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 Hennessy Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Hennessy Technology.
Diversification Opportunities for Tekla Healthcare and Hennessy Technology
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tekla and Hennessy is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and Hennessy Technology Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hennessy Technology 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 Hennessy Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hennessy Technology has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Hennessy Technology go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Hennessy Technology
Considering the 90-day investment horizon Tekla Healthcare Opportunities is expected to under-perform the Hennessy Technology. But the fund apears to be less risky and, when comparing its historical volatility, Tekla Healthcare Opportunities is 1.06 times less risky than Hennessy Technology. The fund trades about -0.02 of its potential returns per unit of risk. The Hennessy Technology Fund is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,274 in Hennessy Technology Fund on September 2, 2024 and sell it today you would earn a total of 198.00 from holding Hennessy Technology Fund or generate 8.71% 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. Hennessy Technology Fund
Performance |
| Timeline |
| Tekla Healthcare Opp |
| Hennessy Technology |
Tekla Healthcare and Hennessy Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and Hennessy Technology
The main advantage of trading using opposite Tekla Healthcare and Hennessy Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Hennessy Technology 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 Hennessy Technology will offset losses from the drop in Hennessy Technology'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 |
| Hennessy Technology vs. Bbh Intermediate Municipal | Hennessy Technology vs. Touchstone Premium Yield | Hennessy Technology vs. Ambrus Core Bond | Hennessy Technology vs. Thrivent Income Fund |
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 CEOs Directory module to screen CEOs from public companies around the world.
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