Correlation Between Tekla Healthcare and Clearbridge Energy
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Clearbridge Energy 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 Clearbridge Energy 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 Clearbridge Energy Mlp, you can compare the effects of market volatilities on Tekla Healthcare and Clearbridge Energy 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 Clearbridge Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Clearbridge Energy.
Diversification Opportunities for Tekla Healthcare and Clearbridge Energy
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tekla and Clearbridge is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Investors and Clearbridge Energy Mlp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearbridge Energy Mlp 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 Clearbridge Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearbridge Energy Mlp has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Clearbridge Energy go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Clearbridge Energy
Assuming the 90 days horizon Tekla Healthcare is expected to generate 1.53 times less return on investment than Clearbridge Energy. But when comparing it to its historical volatility, Tekla Healthcare Investors is 1.53 times less risky than Clearbridge Energy. It trades about 0.22 of its potential returns per unit of risk. Clearbridge Energy Mlp is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 5,232 in Clearbridge Energy Mlp on November 7, 2024 and sell it today you would earn a total of 345.00 from holding Clearbridge Energy Mlp or generate 6.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Tekla Healthcare Investors vs. Clearbridge Energy Mlp
Performance |
| Timeline |
| Tekla Healthcare Inv |
| Clearbridge Energy Mlp |
Tekla Healthcare and Clearbridge Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and Clearbridge Energy
The main advantage of trading using opposite Tekla Healthcare and Clearbridge Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Clearbridge Energy 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 Clearbridge Energy will offset losses from the drop in Clearbridge Energy's long position.| Tekla Healthcare vs. Vanguard Total Stock | Tekla Healthcare vs. Vanguard 500 Index | Tekla Healthcare vs. Vanguard Total Stock | Tekla Healthcare vs. Vanguard Total Stock |
| Clearbridge Energy vs. Goldman Sachs Short | Clearbridge Energy vs. Touchstone Ultra Short | Clearbridge Energy vs. Ab Bond Inflation | Clearbridge Energy vs. Dreyfusstandish Global Fixed |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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