Correlation Between Tekla Healthcare and Templeton Global
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Templeton Global 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 Templeton Global 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 Templeton Global Bond, you can compare the effects of market volatilities on Tekla Healthcare and Templeton Global 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 Templeton Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Templeton Global.
Diversification Opportunities for Tekla Healthcare and Templeton Global
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tekla and Templeton is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and Templeton Global Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Global Bond 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 Templeton Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Global Bond has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Templeton Global go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Templeton Global
Considering the 90-day investment horizon Tekla Healthcare Opportunities is expected to generate 2.13 times more return on investment than Templeton Global. However, Tekla Healthcare is 2.13 times more volatile than Templeton Global Bond. It trades about 0.03 of its potential returns per unit of risk. Templeton Global Bond is currently generating about -0.04 per unit of risk. If you would invest 2,073 in Tekla Healthcare Opportunities on September 1, 2024 and sell it today you would earn a total of 15.00 from holding Tekla Healthcare Opportunities or generate 0.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tekla Healthcare Opportunities vs. Templeton Global Bond
Performance |
| Timeline |
| Tekla Healthcare Opp |
| Templeton Global Bond |
Tekla Healthcare and Templeton Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and Templeton Global
The main advantage of trading using opposite Tekla Healthcare and Templeton Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Templeton Global 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 Templeton Global will offset losses from the drop in Templeton Global'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 |
| Templeton Global vs. Franklin Mutual Beacon | Templeton Global vs. Templeton Developing Markets | Templeton Global vs. Franklin Mutual Global | Templeton Global vs. Franklin Mutual Global |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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