Correlation Between Tekla Healthcare and Total Return
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Total Return 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 Total Return 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 Total Return Bond, you can compare the effects of market volatilities on Tekla Healthcare and Total Return 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 Total Return. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Total Return.
Diversification Opportunities for Tekla Healthcare and Total Return
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Tekla and Total is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Investors and Total Return Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Return Bond 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 Total Return. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Return Bond has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Total Return go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Total Return
Assuming the 90 days horizon Tekla Healthcare Investors is expected to generate 3.38 times more return on investment than Total Return. However, Tekla Healthcare is 3.38 times more volatile than Total Return Bond. It trades about 0.1 of its potential returns per unit of risk. Total Return Bond is currently generating about 0.07 per unit of risk. If you would invest 1,865 in Tekla Healthcare Investors on October 25, 2024 and sell it today you would earn a total of 32.00 from holding Tekla Healthcare Investors or generate 1.72% 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. Total Return Bond
Performance |
| Timeline |
| Tekla Healthcare Inv |
| Total Return Bond |
Tekla Healthcare and Total Return Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and Total Return
The main advantage of trading using opposite Tekla Healthcare and Total Return positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Total Return 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 Total Return will offset losses from the drop in Total Return'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 |
| Total Return vs. Allianzgi Technology Fund | Total Return vs. Science Technology Fund | Total Return vs. Technology Ultrasector Profund | Total Return vs. Columbia Global Technology |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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