Correlation Between Tekla Healthcare and Pimco International
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Pimco International 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 Pimco International 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 Pimco International Bond, you can compare the effects of market volatilities on Tekla Healthcare and Pimco International 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 Pimco International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Pimco International.
Diversification Opportunities for Tekla Healthcare and Pimco International
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tekla and Pimco is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Investors and Pimco International Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pimco International 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 Pimco International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pimco International Bond has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Pimco International go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Pimco International
Assuming the 90 days horizon Tekla Healthcare Investors is expected to under-perform the Pimco International. In addition to that, Tekla Healthcare is 2.1 times more volatile than Pimco International Bond. It trades about -0.04 of its total potential returns per unit of risk. Pimco International Bond is currently generating about 0.02 per unit of volatility. If you would invest 727.00 in Pimco International Bond on October 24, 2024 and sell it today you would earn a total of 12.00 from holding Pimco International Bond or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tekla Healthcare Investors vs. Pimco International Bond
Performance |
| Timeline |
| Tekla Healthcare Inv |
| Pimco International Bond |
Tekla Healthcare and Pimco International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and Pimco International
The main advantage of trading using opposite Tekla Healthcare and Pimco International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Pimco International 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 Pimco International will offset losses from the drop in Pimco International's long position.| Tekla Healthcare vs. Fidelity Sai Convertible | Tekla Healthcare vs. Lord Abbett Convertible | Tekla Healthcare vs. Calamos Dynamic Convertible | Tekla Healthcare vs. Virtus Convertible |
| Pimco International vs. Blackrock Health Sciences | Pimco International vs. Fidelity Advisor Health | Pimco International vs. Allianzgi Health Sciences | Pimco International vs. Tekla Healthcare Investors |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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