Correlation Between Aberdeen Global and Tekla Healthcare
Can any of the company-specific risk be diversified away by investing in both Aberdeen Global and Tekla Healthcare 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 Aberdeen Global and Tekla Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aberdeen Global Small and Tekla Healthcare Opportunities, you can compare the effects of market volatilities on Aberdeen Global and Tekla Healthcare 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 Aberdeen Global with a short position of Tekla Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aberdeen Global and Tekla Healthcare.
Diversification Opportunities for Aberdeen Global and Tekla Healthcare
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aberdeen and Tekla is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Global Small and Tekla Healthcare Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekla Healthcare Opp and Aberdeen Global 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 Aberdeen Global Small are associated (or correlated) with Tekla Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tekla Healthcare Opp has no effect on the direction of Aberdeen Global i.e., Aberdeen Global and Tekla Healthcare go up and down completely randomly.
Pair Corralation between Aberdeen Global and Tekla Healthcare
Assuming the 90 days horizon Aberdeen Global is expected to generate 1.72 times less return on investment than Tekla Healthcare. But when comparing it to its historical volatility, Aberdeen Global Small is 1.24 times less risky than Tekla Healthcare. It trades about 0.05 of its potential returns per unit of risk. Tekla Healthcare Opportunities is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,019 in Tekla Healthcare Opportunities on December 2, 2024 and sell it today you would earn a total of 87.00 from holding Tekla Healthcare Opportunities or generate 4.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Aberdeen Global Small vs. Tekla Healthcare Opportunities
Performance |
Timeline |
Aberdeen Global Small |
Tekla Healthcare Opp |
Aberdeen Global and Tekla Healthcare Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Aberdeen Global and Tekla Healthcare
The main advantage of trading using opposite Aberdeen Global and Tekla Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aberdeen Global position performs unexpectedly, Tekla Healthcare 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 Tekla Healthcare will offset losses from the drop in Tekla Healthcare's long position.Aberdeen Global vs. Barings Global Floating | Aberdeen Global vs. Investec Global Franchise | Aberdeen Global vs. Doubleline Global Bond | Aberdeen Global vs. T Rowe Price |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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