Correlation Between Tekla Healthcare and Invesco Global
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Invesco 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 Invesco Global 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 Invesco Global Health, you can compare the effects of market volatilities on Tekla Healthcare and Invesco 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 Invesco Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Invesco Global.
Diversification Opportunities for Tekla Healthcare and Invesco Global
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tekla and Invesco is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Investors and Invesco Global Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Invesco Global Health 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 Invesco Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Invesco Global Health has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Invesco Global go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Invesco Global
Assuming the 90 days horizon Tekla Healthcare Investors is expected to generate 0.79 times more return on investment than Invesco Global. However, Tekla Healthcare Investors is 1.26 times less risky than Invesco Global. It trades about -0.08 of its potential returns per unit of risk. Invesco Global Health is currently generating about -0.09 per unit of risk. If you would invest 2,085 in Tekla Healthcare Investors on October 25, 2024 and sell it today you would lose (188.00) from holding Tekla Healthcare Investors or give up 9.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tekla Healthcare Investors vs. Invesco Global Health
Performance |
| Timeline |
| Tekla Healthcare Inv |
| Invesco Global Health |
Tekla Healthcare and Invesco Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and Invesco Global
The main advantage of trading using opposite Tekla Healthcare and Invesco Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Invesco 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 Invesco Global will offset losses from the drop in Invesco Global's long position.| Tekla Healthcare vs. Americafirst Large Cap | Tekla Healthcare vs. Calvert Large Cap | Tekla Healthcare vs. Avantis Large Cap | Tekla Healthcare vs. Blackrock Large Cap |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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