Correlation Between Walden Smid and Tekla Healthcare
Can any of the company-specific risk be diversified away by investing in both Walden Smid 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 Walden Smid and Tekla Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Walden Smid Cap and Tekla Healthcare Investors, you can compare the effects of market volatilities on Walden Smid 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 Walden Smid with a short position of Tekla Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Walden Smid and Tekla Healthcare.
Diversification Opportunities for Walden Smid and Tekla Healthcare
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Walden and Tekla is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Walden Smid Cap 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 Walden Smid 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 Walden Smid Cap 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 Walden Smid i.e., Walden Smid and Tekla Healthcare go up and down completely randomly.
Pair Corralation between Walden Smid and Tekla Healthcare
Assuming the 90 days horizon Walden Smid Cap is expected to under-perform the Tekla Healthcare. But the mutual fund apears to be less risky and, when comparing its historical volatility, Walden Smid Cap is 1.1 times less risky than Tekla Healthcare. The mutual fund trades about -0.17 of its potential returns per unit of risk. The Tekla Healthcare Investors is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 1,896 in Tekla Healthcare Investors on October 26, 2024 and sell it today you would earn a total of 6.00 from holding Tekla Healthcare Investors or generate 0.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Walden Smid Cap vs. Tekla Healthcare Investors
Performance |
| Timeline |
| Walden Smid Cap |
| Tekla Healthcare Inv |
Walden Smid and Tekla Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Walden Smid and Tekla Healthcare
The main advantage of trading using opposite Walden Smid and Tekla Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Walden Smid 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.| Walden Smid vs. Walden Midcap Fund | Walden Smid vs. Calvert Small Cap | Walden Smid vs. Calvert International Equity | Walden Smid vs. Champlain Mid Cap |
| Tekla Healthcare vs. Fpa Queens Road | Tekla Healthcare vs. Ab Small Cap | Tekla Healthcare vs. Fidelity Small Cap | Tekla Healthcare vs. Walden Smid Cap |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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