Correlation Between Tekla Healthcare and Western Asset
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Western Asset 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 Western Asset 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 Western Asset Municipal, you can compare the effects of market volatilities on Tekla Healthcare and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Western Asset.
Diversification Opportunities for Tekla Healthcare and Western Asset
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Tekla and Western is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Investors and Western Asset Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Municipal 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Municipal has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Western Asset go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Western Asset
Assuming the 90 days horizon Tekla Healthcare Investors is expected to under-perform the Western Asset. In addition to that, Tekla Healthcare is 3.97 times more volatile than Western Asset Municipal. It trades about -0.14 of its total potential returns per unit of risk. Western Asset Municipal is currently generating about -0.43 per unit of volatility. If you would invest 733.00 in Western Asset Municipal on October 9, 2024 and sell it today you would lose (15.00) from holding Western Asset Municipal or give up 2.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tekla Healthcare Investors vs. Western Asset Municipal
Performance |
| Timeline |
| Tekla Healthcare Inv |
| Western Asset Municipal |
Tekla Healthcare and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and Western Asset
The main advantage of trading using opposite Tekla Healthcare and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset's long position.| Tekla Healthcare vs. Nuveen Real Estate | Tekla Healthcare vs. Pender Real Estate | Tekla Healthcare vs. Columbia Real Estate | Tekla Healthcare vs. Dunham Real Estate |
| Western Asset vs. Rbc Short Duration | Western Asset vs. Fidelity Flex Servative | Western Asset vs. Nuveen Short Term | Western Asset vs. Alpine Ultra Short |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |