Correlation Between Vanguard Health and Tekla Healthcare
Can any of the company-specific risk be diversified away by investing in both Vanguard Health and Tekla Healthcare 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 Vanguard Health and Tekla Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vanguard Health Care and Tekla Healthcare Investors, you can compare the effects of market volatilities on Vanguard Health and Tekla Healthcare 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 Vanguard Health with a short position of Tekla Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vanguard Health and Tekla Healthcare.
Diversification Opportunities for Vanguard Health and Tekla Healthcare
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between VANGUARD and Tekla is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Vanguard Health Care and Tekla Healthcare Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekla Healthcare Inv and Vanguard Health 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 Vanguard Health Care are associated (or correlated) with Tekla Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tekla Healthcare Inv has no effect on the direction of Vanguard Health i.e., Vanguard Health and Tekla Healthcare go up and down completely randomly.
Pair Corralation between Vanguard Health and Tekla Healthcare
Assuming the 90 days horizon Vanguard Health Care is expected to generate 0.74 times more return on investment than Tekla Healthcare. However, Vanguard Health Care is 1.36 times less risky than Tekla Healthcare. It trades about -0.14 of its potential returns per unit of risk. Tekla Healthcare Investors is currently generating about -0.15 per unit of risk. If you would invest 13,826 in Vanguard Health Care on October 22, 2024 and sell it today you would lose (891.00) from holding Vanguard Health Care or give up 6.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Vanguard Health Care vs. Tekla Healthcare Investors
Performance |
| Timeline |
| Vanguard Health Care |
| Tekla Healthcare Inv |
Vanguard Health and Tekla Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vanguard Health and Tekla Healthcare
The main advantage of trading using opposite Vanguard Health and Tekla Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vanguard Health position performs unexpectedly, Tekla Healthcare 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 Tekla Healthcare will offset losses from the drop in Tekla Healthcare's long position.| Vanguard Health vs. Vanguard Information Technology | Vanguard Health vs. Vanguard Sumer Staples | Vanguard Health vs. Vanguard Sumer Discretionary | Vanguard Health vs. Vanguard Financials Index |
| Tekla Healthcare vs. Tiaa Cref Lifestyle Conservative | Tekla Healthcare vs. Stone Ridge Diversified | Tekla Healthcare vs. Madison Diversified Income | Tekla Healthcare vs. Calvert Conservative Allocation |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum |