Correlation Between Rbb Fund and Tekla Healthcare

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

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

Diversification Opportunities for Rbb Fund and Tekla Healthcare

0.73

Correlation Coefficient

Rbb Fund  Tekla Healthcare

Poor diversification

The 3 months correlation between Rbb and Tekla is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Rbb Fund Trust 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 Rbb Fund 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 Rbb Fund Trust 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 Rbb Fund i.e., Rbb Fund and Tekla Healthcare go up and down completely randomly.

Pair Corralation between Rbb Fund and Tekla Healthcare

Assuming the 90 days horizon Rbb Fund Trust is expected to generate 0.61 times more return on investment than Tekla Healthcare. However, Rbb Fund Trust is 1.65 times less risky than Tekla Healthcare. It trades about 0.21 of its potential returns per unit of risk. Tekla Healthcare Opportunities is currently generating about 0.1 per unit of risk. If you would invest  1,093  in Rbb Fund Trust on October 27, 2024 and sell it today you would earn a total of  25.00  from holding Rbb Fund Trust or generate 2.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.0%
Values	Daily Returns

Rbb Fund Trust  vs.  Tekla Healthcare Opportunities

Rbb Fund Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rbb Fund Trust has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Rbb Fund is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Tekla Healthcare Opp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tekla Healthcare Opportunities has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Tekla Healthcare is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Rbb Fund and Tekla Healthcare

The main advantage of trading using opposite Rbb Fund and Tekla Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rbb Fund 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 Rbb Fund Trust 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.