Correlation Between Tekla Healthcare and Dreyfus Technology
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Dreyfus Technology 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 Dreyfus Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tekla Healthcare Investors and Dreyfus Technology Growth, you can compare the effects of market volatilities on Tekla Healthcare and Dreyfus Technology 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 Dreyfus Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Dreyfus Technology.
Diversification Opportunities for Tekla Healthcare and Dreyfus Technology
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Tekla and Dreyfus is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Investors and Dreyfus Technology Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Technology Growth 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 Investors are associated (or correlated) with Dreyfus Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Technology Growth has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Dreyfus Technology go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Dreyfus Technology
Assuming the 90 days horizon Tekla Healthcare Investors is expected to generate 0.63 times more return on investment than Dreyfus Technology. However, Tekla Healthcare Investors is 1.59 times less risky than Dreyfus Technology. It trades about 0.22 of its potential returns per unit of risk. Dreyfus Technology Growth is currently generating about 0.04 per unit of risk. If you would invest 1,868 in Tekla Healthcare Investors on November 7, 2024 and sell it today you would earn a total of 85.00 from holding Tekla Healthcare Investors or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tekla Healthcare Investors vs. Dreyfus Technology Growth
Performance |
| Timeline |
| Tekla Healthcare Inv |
| Dreyfus Technology Growth |
Tekla Healthcare and Dreyfus Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and Dreyfus Technology
The main advantage of trading using opposite Tekla Healthcare and Dreyfus Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Dreyfus Technology 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 Dreyfus Technology will offset losses from the drop in Dreyfus Technology's long position.| Tekla Healthcare vs. Vanguard Total Stock | Tekla Healthcare vs. Vanguard 500 Index | Tekla Healthcare vs. Vanguard Total Stock | Tekla Healthcare vs. Vanguard Total Stock |
| Dreyfus Technology vs. Fkhemx | Dreyfus Technology vs. Rbb Fund | Dreyfus Technology vs. Small Pany Growth | Dreyfus Technology vs. Fxybjx |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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