Correlation Between Tekla Healthcare and Aqr Long-short
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Aqr Long-short 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 Aqr Long-short 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 Aqr Long Short Equity, you can compare the effects of market volatilities on Tekla Healthcare and Aqr Long-short 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 Aqr Long-short. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Aqr Long-short.
Diversification Opportunities for Tekla Healthcare and Aqr Long-short
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tekla and Aqr is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Investors and Aqr Long Short Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aqr Long Short 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 Aqr Long-short. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aqr Long Short has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Aqr Long-short go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Aqr Long-short
Assuming the 90 days horizon Tekla Healthcare Investors is expected to under-perform the Aqr Long-short. In addition to that, Tekla Healthcare is 2.09 times more volatile than Aqr Long Short Equity. It trades about -0.11 of its total potential returns per unit of risk. Aqr Long Short Equity is currently generating about 0.23 per unit of volatility. If you would invest 1,551 in Aqr Long Short Equity on October 11, 2024 and sell it today you would earn a total of 35.00 from holding Aqr Long Short Equity or generate 2.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tekla Healthcare Investors vs. Aqr Long Short Equity
Performance |
| Timeline |
| Tekla Healthcare Inv |
| Aqr Long Short |
Tekla Healthcare and Aqr Long-short Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and Aqr Long-short
The main advantage of trading using opposite Tekla Healthcare and Aqr Long-short positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Aqr Long-short 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 Aqr Long-short will offset losses from the drop in Aqr Long-short's long position.| Tekla Healthcare vs. Lord Abbett Vertible | Tekla Healthcare vs. Virtus Convertible | Tekla Healthcare vs. Putnam Vertible Securities | Tekla Healthcare vs. Advent Claymore Convertible |
| Aqr Long-short vs. Blackrock Health Sciences | Aqr Long-short vs. Prudential Health Sciences | Aqr Long-short vs. Tekla Healthcare Investors | Aqr Long-short vs. Health Care Ultrasector |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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