Correlation Between Tekla Healthcare and Payden Limited
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Payden Limited 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 Payden Limited 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 Payden Limited Maturity, you can compare the effects of market volatilities on Tekla Healthcare and Payden Limited 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 Payden Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Payden Limited.
Diversification Opportunities for Tekla Healthcare and Payden Limited
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tekla and Payden is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and Payden Limited Maturity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Payden Limited Maturity 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 Payden Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Payden Limited Maturity has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Payden Limited go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Payden Limited
Considering the 90-day investment horizon Tekla Healthcare Opportunities is expected to under-perform the Payden Limited. In addition to that, Tekla Healthcare is 51.85 times more volatile than Payden Limited Maturity. It trades about -0.32 of its total potential returns per unit of risk. Payden Limited Maturity is currently generating about -0.22 per unit of volatility. If you would invest 957.00 in Payden Limited Maturity on October 7, 2024 and sell it today you would lose (1.00) from holding Payden Limited Maturity or give up 0.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tekla Healthcare Opportunities vs. Payden Limited Maturity
Performance |
| Timeline |
| Tekla Healthcare Opp |
| Payden Limited Maturity |
Tekla Healthcare and Payden Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and Payden Limited
The main advantage of trading using opposite Tekla Healthcare and Payden Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Payden Limited 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 Payden Limited will offset losses from the drop in Payden Limited'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 |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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