Correlation Between Tekla Healthcare and Icon Financial
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Icon Financial 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 Icon Financial 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 Icon Financial Fund, you can compare the effects of market volatilities on Tekla Healthcare and Icon Financial 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 Icon Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Icon Financial.
Diversification Opportunities for Tekla Healthcare and Icon Financial
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tekla and Icon is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and Icon Financial Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Icon Financial 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 Icon Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Icon Financial has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Icon Financial go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Icon Financial
Considering the 90-day investment horizon Tekla Healthcare Opportunities is expected to generate 0.98 times more return on investment than Icon Financial. However, Tekla Healthcare Opportunities is 1.02 times less risky than Icon Financial. It trades about 0.06 of its potential returns per unit of risk. Icon Financial Fund is currently generating about 0.05 per unit of risk. If you would invest 1,671 in Tekla Healthcare Opportunities on August 31, 2024 and sell it today you would earn a total of 417.00 from holding Tekla Healthcare Opportunities or generate 24.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Tekla Healthcare Opportunities vs. Icon Financial Fund
Performance |
| Timeline |
| Tekla Healthcare Opp |
| Icon Financial |
Tekla Healthcare and Icon Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and Icon Financial
The main advantage of trading using opposite Tekla Healthcare and Icon Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Icon Financial 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 Icon Financial will offset losses from the drop in Icon Financial's long position.| Tekla Healthcare vs. MFS Investment Grade | Tekla Healthcare vs. Eaton Vance Municipal | Tekla Healthcare vs. DTF Tax Free | Tekla Healthcare vs. HUMANA INC |
| Icon Financial vs. Touchstone Small Cap | Icon Financial vs. Small Pany Growth | Icon Financial vs. Legg Mason Partners | Icon Financial vs. Growth Opportunities 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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