Correlation Between Tekla Healthcare and Gabelli Global

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

By analyzing existing cross correlation between Tekla Healthcare Opportunities and Gabelli Global Small, you can compare the effects of market volatilities on Tekla Healthcare and Gabelli 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 Gabelli Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Gabelli Global.

Diversification Opportunities for Tekla Healthcare and Gabelli Global

-0.35

Correlation Coefficient

Tekla Healthcare  Gabelli Global

Very good diversification

The 3 months correlation between Tekla and Gabelli is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and Gabelli Global Small in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Global Small 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 Opportunities are associated (or correlated) with Gabelli Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Global Small has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Gabelli Global go up and down completely randomly.

Pair Corralation between Tekla Healthcare and Gabelli Global

Considering the 90-day investment horizon Tekla Healthcare Opportunities is expected to under-perform the Gabelli Global. In addition to that, Tekla Healthcare is 1.22 times more volatile than Gabelli Global Small. It trades about -0.05 of its total potential returns per unit of risk. Gabelli Global Small is currently generating about 0.15 per unit of volatility. If you would invest  1,199  in Gabelli Global Small on August 30, 2024 and sell it today you would earn a total of  100.00  from holding Gabelli Global Small or generate 8.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Tekla Healthcare Opportunities  vs.  Gabelli Global Small

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. Even with relatively invariable technical indicators, Tekla Healthcare is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Gabelli Global Small

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gabelli Global Small are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent technical and fundamental indicators, Gabelli Global may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Tekla Healthcare and Gabelli Global

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

The idea behind Tekla Healthcare Opportunities and Gabelli Global Small 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..