Correlation Between Tekla Healthcare and Hartford Small
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Hartford Small 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 Hartford Small 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 The Hartford Small, you can compare the effects of market volatilities on Tekla Healthcare and Hartford Small 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 Hartford Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Hartford Small.
Diversification Opportunities for Tekla Healthcare and Hartford Small
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tekla and Hartford is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and The Hartford Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hartford 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 Hartford Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hartford Small has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Hartford Small go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Hartford Small
Considering the 90-day investment horizon Tekla Healthcare is expected to generate 1.18 times less return on investment than Hartford Small. But when comparing it to its historical volatility, Tekla Healthcare Opportunities is 1.23 times less risky than Hartford Small. It trades about 0.11 of its potential returns per unit of risk. The Hartford Small is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,603 in The Hartford Small on September 14, 2024 and sell it today you would earn a total of 561.00 from holding The Hartford Small or generate 35.0% 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. The Hartford Small
Performance |
| Timeline |
| Tekla Healthcare Opp |
| Hartford Small |
Tekla Healthcare and Hartford Small Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and Hartford Small
The main advantage of trading using opposite Tekla Healthcare and Hartford Small positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Hartford Small 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 Hartford Small will offset losses from the drop in Hartford Small'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 |
| Hartford Small vs. The Gabelli Healthcare | Hartford Small vs. Invesco Global Health | Hartford Small vs. Blackrock Health Sciences | Hartford Small vs. Tekla Healthcare Opportunities |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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