Correlation Between Tekla Healthcare and Guggenheim Market

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

Diversification Opportunities for Tekla Healthcare and Guggenheim Market

-0.52

Correlation Coefficient

Tekla Healthcare  Guggenheim Market

Excellent diversification

The 3 months correlation between Tekla and Guggenheim is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and Guggenheim Market Neutral in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Market Neutral 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 Guggenheim Market. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Market Neutral has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Guggenheim Market go up and down completely randomly.

Pair Corralation between Tekla Healthcare and Guggenheim Market

If you would invest  1,846  in Tekla Healthcare Opportunities on December 29, 2024 and sell it today you would earn a total of  200.00  from holding Tekla Healthcare Opportunities or generate 10.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	24.59%
Values	Daily Returns

Tekla Healthcare Opportunities  vs.  Guggenheim Market Neutral

Tekla Healthcare Opp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tekla Healthcare Opportunities are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. Even with relatively inconsistent technical indicators, Tekla Healthcare may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Guggenheim Market Neutral

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Tekla Healthcare and Guggenheim Market

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

The idea behind Tekla Healthcare Opportunities and Guggenheim Market Neutral 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.