Correlation Between XAI Octagon and Tekla World
Can any of the company-specific risk be diversified away by investing in both XAI Octagon and Tekla World 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 XAI Octagon and Tekla World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XAI Octagon Floating and Tekla World Healthcare, you can compare the effects of market volatilities on XAI Octagon and Tekla World 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 XAI Octagon with a short position of Tekla World. Check out your portfolio center. Please also check ongoing floating volatility patterns of XAI Octagon and Tekla World.
Diversification Opportunities for XAI Octagon and Tekla World
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between XAI and Tekla is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding XAI Octagon Floating and Tekla World Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekla World Healthcare and XAI Octagon 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 XAI Octagon Floating are associated (or correlated) with Tekla World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tekla World Healthcare has no effect on the direction of XAI Octagon i.e., XAI Octagon and Tekla World go up and down completely randomly.
Pair Corralation between XAI Octagon and Tekla World
Given the investment horizon of 90 days XAI Octagon Floating is expected to generate 0.47 times more return on investment than Tekla World. However, XAI Octagon Floating is 2.15 times less risky than Tekla World. It trades about 0.11 of its potential returns per unit of risk. Tekla World Healthcare is currently generating about -0.01 per unit of risk. If you would invest 670.00 in XAI Octagon Floating on September 3, 2024 and sell it today you would earn a total of 35.00 from holding XAI Octagon Floating or generate 5.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
XAI Octagon Floating vs. Tekla World Healthcare
Performance |
| Timeline |
| XAI Octagon Floating |
| Tekla World Healthcare |
XAI Octagon and Tekla World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XAI Octagon and Tekla World
The main advantage of trading using opposite XAI Octagon and Tekla World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XAI Octagon position performs unexpectedly, Tekla World 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 World will offset losses from the drop in Tekla World's long position.| XAI Octagon vs. Oxford Lane Capital | XAI Octagon vs. Capital Southwest | XAI Octagon vs. Cornerstone Strategic Return | XAI Octagon vs. Cornerstone Strategic Value |
| Tekla World vs. Tekla Healthcare Investors | Tekla World vs. Tekla Life Sciences | Tekla World vs. Flaherty and Crumrine | Tekla World vs. Cohen And Steers |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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