Correlation Between Tekla Healthcare and Macquarie/first
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Macquarie/first 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 Macquarie/first 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 Macquariefirst Tr Global, you can compare the effects of market volatilities on Tekla Healthcare and Macquarie/first 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 Macquarie/first. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Macquarie/first.
Diversification Opportunities for Tekla Healthcare and Macquarie/first
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Tekla and Macquarie/first is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Investors and Macquariefirst Tr Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquariefirst Tr Global 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 Macquarie/first. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquariefirst Tr Global has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Macquarie/first go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Macquarie/first
Considering the 90-day investment horizon Tekla Healthcare Investors is expected to generate 0.95 times more return on investment than Macquarie/first. However, Tekla Healthcare Investors is 1.05 times less risky than Macquarie/first. It trades about 0.14 of its potential returns per unit of risk. Macquariefirst Tr Global is currently generating about 0.05 per unit of risk. If you would invest 1,466 in Tekla Healthcare Investors on March 11, 2024 and sell it today you would earn a total of 229.00 from holding Tekla Healthcare Investors or generate 15.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Tekla Healthcare Investors vs. Macquariefirst Tr Global
Performance |
Timeline |
Tekla Healthcare Inv |
Macquariefirst Tr Global |
Tekla Healthcare and Macquarie/first Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tekla Healthcare and Macquarie/first
The main advantage of trading using opposite Tekla Healthcare and Macquarie/first positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Macquarie/first 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 Macquarie/first will offset losses from the drop in Macquarie/first's long position.Tekla Healthcare vs. CMS Energy Corp | Tekla Healthcare vs. Southern Co | Tekla Healthcare vs. Duke Energy Corp | Tekla Healthcare vs. Southern Co |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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