Correlation Between Tekla Healthcare and Sp 500
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Sp 500 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 Sp 500 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 Sp 500 Equal, you can compare the effects of market volatilities on Tekla Healthcare and Sp 500 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 Sp 500. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Sp 500.
Diversification Opportunities for Tekla Healthcare and Sp 500
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tekla and INDEX is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Investors and Sp 500 Equal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sp 500 Equal 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 Sp 500. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sp 500 Equal has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Sp 500 go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Sp 500
Assuming the 90 days horizon Tekla Healthcare Investors is expected to generate 0.94 times more return on investment than Sp 500. However, Tekla Healthcare Investors is 1.07 times less risky than Sp 500. It trades about -0.13 of its potential returns per unit of risk. Sp 500 Equal is currently generating about -0.19 per unit of risk. If you would invest 1,920 in Tekla Healthcare Investors on October 10, 2024 and sell it today you would lose (52.00) from holding Tekla Healthcare Investors or give up 2.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tekla Healthcare Investors vs. Sp 500 Equal
Performance |
| Timeline |
| Tekla Healthcare Inv |
| Sp 500 Equal |
Tekla Healthcare and Sp 500 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and Sp 500
The main advantage of trading using opposite Tekla Healthcare and Sp 500 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Sp 500 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 Sp 500 will offset losses from the drop in Sp 500's long position.| Tekla Healthcare vs. T Rowe Price | Tekla Healthcare vs. Tfa Alphagen Growth | Tekla Healthcare vs. Eip Growth And | Tekla Healthcare vs. Small Pany Growth |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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