Correlation Between Aberdeen Global and Tekla Healthcare

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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 Premier 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

0.56
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Aberdeen and Tekla is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Aberdeen Global Premier 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 Premier 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

Considering the 90-day investment horizon Aberdeen Global Premier is expected to generate 1.01 times more return on investment than Tekla Healthcare. However, Aberdeen Global is 1.01 times more volatile than Tekla Healthcare Opportunities. It trades about -0.12 of its potential returns per unit of risk. Tekla Healthcare Opportunities is currently generating about -0.15 per unit of risk. If you would invest  414.00  in Aberdeen Global Premier on October 7, 2024 and sell it today you would lose (28.00) from holding Aberdeen Global Premier or give up 6.76% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Aberdeen Global Premier  vs.  Tekla Healthcare Opportunities

 Performance 
       Timeline  
Aberdeen Global Premier 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Aberdeen Global Premier has generated negative risk-adjusted returns adding no value to fund investors. Even with latest unsteady performance, the Fund's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the fund retail investors.
Tekla Healthcare Opp 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Tekla Healthcare Opportunities has generated negative risk-adjusted returns adding no value to fund investors. Even with latest inconsistent performance, the Fund's technical indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the fund retail investors.

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.
The idea behind Aberdeen Global Premier and Tekla Healthcare Opportunities pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

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