Correlation Between Tekla Healthcare and Small-cap Profund
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Small-cap Profund 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 Small-cap Profund 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 Small Cap Profund Small Cap, you can compare the effects of market volatilities on Tekla Healthcare and Small-cap Profund 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 Small-cap Profund. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Small-cap Profund.
Diversification Opportunities for Tekla Healthcare and Small-cap Profund
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tekla and Small-cap is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and Small Cap Profund Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Small Cap Profund 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 Small-cap Profund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Small Cap Profund has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Small-cap Profund go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Small-cap Profund
Considering the 90-day investment horizon Tekla Healthcare Opportunities is expected to under-perform the Small-cap Profund. But the fund apears to be less risky and, when comparing its historical volatility, Tekla Healthcare Opportunities is 1.2 times less risky than Small-cap Profund. The fund trades about -0.11 of its potential returns per unit of risk. The Small Cap Profund Small Cap is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 11,509 in Small Cap Profund Small Cap on August 27, 2024 and sell it today you would earn a total of 1,005 from holding Small Cap Profund Small Cap or generate 8.73% 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. Small Cap Profund Small Cap
Performance |
| Timeline |
| Tekla Healthcare Opp |
| Small Cap Profund |
Tekla Healthcare and Small-cap Profund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and Small-cap Profund
The main advantage of trading using opposite Tekla Healthcare and Small-cap Profund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Small-cap Profund 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 Small-cap Profund will offset losses from the drop in Small-cap Profund'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 |
| Small-cap Profund vs. Baillie Gifford Health | Small-cap Profund vs. Tekla Healthcare Opportunities | Small-cap Profund vs. Delaware Healthcare Fund | Small-cap Profund vs. Alger Health Sciences |
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 Stocks Directory module to find actively traded stocks across global markets.
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