Correlation Between Tekla Healthcare and Clough Global

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

Diversification Opportunities for Tekla Healthcare and Clough Global

0.61

Correlation Coefficient

Tekla Healthcare  Clough Global

Poor diversification

The 3 months correlation between Tekla and Clough is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Investors and Clough Global Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clough Global Allocation 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 Clough Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clough Global Allocation has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Clough Global go up and down completely randomly.

Pair Corralation between Tekla Healthcare and Clough Global

Considering the 90-day investment horizon Tekla Healthcare is expected to generate 1.23 times less return on investment than Clough Global. In addition to that, Tekla Healthcare is 1.41 times more volatile than Clough Global Allocation. It trades about 0.07 of its total potential returns per unit of risk. Clough Global Allocation is currently generating about 0.12 per unit of volatility. If you would invest  527.00  in Clough Global Allocation on December 27, 2024 and sell it today you would earn a total of  27.00  from holding Clough Global Allocation or generate 5.12% 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.  Clough Global Allocation

Tekla Healthcare Inv

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Tekla Healthcare Investors are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. 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.

Clough Global Allocation

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Clough Global Allocation are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly stable essential indicators, Clough Global is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Tekla Healthcare and Clough Global

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

The idea behind Tekla Healthcare Investors and Clough Global Allocation 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.