Correlation Between Tekla Healthcare and Duff

Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Duff 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 Duff 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 Duff And Phelps, you can compare the effects of market volatilities on Tekla Healthcare and Duff 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 Duff. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Duff.

Diversification Opportunities for Tekla Healthcare and Duff

0.69

Correlation Coefficient

Tekla Healthcare  Duff

Poor diversification

The 3 months correlation between Tekla and Duff is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Investors and Duff And Phelps in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duff And Phelps 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 Duff. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duff And Phelps has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Duff go up and down completely randomly.

Pair Corralation between Tekla Healthcare and Duff

Considering the 90-day investment horizon Tekla Healthcare is expected to generate 1.55 times less return on investment than Duff. In addition to that, Tekla Healthcare is 1.1 times more volatile than Duff And Phelps. It trades about 0.01 of its total potential returns per unit of risk. Duff And Phelps is currently generating about 0.01 per unit of volatility. If you would invest  1,195  in Duff And Phelps on December 4, 2024 and sell it today you would earn a total of  4.00  from holding Duff And Phelps or generate 0.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Tekla Healthcare Investors  vs.  Duff And Phelps

Tekla Healthcare Inv

Risk-Adjusted Performance

Weak

Over the last 90 days Tekla Healthcare Investors has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Tekla Healthcare is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Duff And Phelps

Risk-Adjusted Performance

Very Weak

Over the last 90 days Duff And Phelps has generated negative risk-adjusted returns adding no value to fund investors. Despite nearly stable basic indicators, Duff is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Tekla Healthcare and Duff

The main advantage of trading using opposite Tekla Healthcare and Duff positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Duff 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 Duff will offset losses from the drop in Duff's long position.

The idea behind Tekla Healthcare Investors and Duff And Phelps 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.