Correlation Between Alphabet and Tekla Healthcare

Can any of the company-specific risk be diversified away by investing in both Alphabet 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 Alphabet and Tekla Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alphabet Inc Class C and Tekla Healthcare Opportunities, you can compare the effects of market volatilities on Alphabet 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 Alphabet with a short position of Tekla Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alphabet and Tekla Healthcare.

Diversification Opportunities for Alphabet and Tekla Healthcare

-0.46

Correlation Coefficient

Alphabet  Tekla Healthcare

Very good diversification

The 3 months correlation between Alphabet and Tekla is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Alphabet Inc Class C 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 Alphabet 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 Alphabet Inc Class C 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 Alphabet i.e., Alphabet and Tekla Healthcare go up and down completely randomly.

Pair Corralation between Alphabet and Tekla Healthcare

Given the investment horizon of 90 days Alphabet Inc Class C is expected to under-perform the Tekla Healthcare. In addition to that, Alphabet is 2.01 times more volatile than Tekla Healthcare Opportunities. It trades about -0.16 of its total potential returns per unit of risk. Tekla Healthcare Opportunities is currently generating about 0.17 per unit of volatility. If you would invest  1,846  in Tekla Healthcare Opportunities on December 28, 2024 and sell it today you would earn a total of  200.00  from holding Tekla Healthcare Opportunities or generate 10.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Alphabet Inc Class C  vs.  Tekla Healthcare Opportunities

Alphabet Class C

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alphabet Inc Class C has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Tekla Healthcare Opp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tekla Healthcare Opportunities are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively inconsistent technical indicators, Tekla Healthcare may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Alphabet and Tekla Healthcare

The main advantage of trading using opposite Alphabet and Tekla Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alphabet 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 Alphabet Inc Class C 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.

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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.