Correlation Between Allianzgi Equity and Tekla Healthcare

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

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

Diversification Opportunities for Allianzgi Equity and Tekla Healthcare

-0.64

Correlation Coefficient

Allianzgi Equity  Tekla Healthcare

Excellent diversification

The 3 months correlation between Allianzgi and Tekla is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Allianzgi Equity Convertible and Tekla Healthcare Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekla Healthcare Inv and Allianzgi Equity 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 Allianzgi Equity Convertible 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 Inv has no effect on the direction of Allianzgi Equity i.e., Allianzgi Equity and Tekla Healthcare go up and down completely randomly.

Pair Corralation between Allianzgi Equity and Tekla Healthcare

Considering the 90-day investment horizon Allianzgi Equity Convertible is expected to generate 0.81 times more return on investment than Tekla Healthcare. However, Allianzgi Equity Convertible is 1.24 times less risky than Tekla Healthcare. It trades about 0.14 of its potential returns per unit of risk. Tekla Healthcare Investors is currently generating about 0.1 per unit of risk. If you would invest  1,907  in Allianzgi Equity Convertible on September 4, 2024 and sell it today you would earn a total of  553.00  from holding Allianzgi Equity Convertible or generate 29.0% return on investment over 90 days.

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

Allianzgi Equity Convertible  vs.  Tekla Healthcare Investors

Allianzgi Equity Con

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Allianzgi Equity Convertible are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of rather inconsistent forward indicators, Allianzgi Equity may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Tekla Healthcare Inv

Risk-Adjusted Performance

0 of 100

Very 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.

Pair Trading with Allianzgi Equity and Tekla Healthcare

The main advantage of trading using opposite Allianzgi Equity and Tekla Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Allianzgi Equity 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 Allianzgi Equity Convertible and Tekla Healthcare Investors 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.