Correlation Between Tekla Healthcare and Jpmorgan Floating

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

Diversification Opportunities for Tekla Healthcare and Jpmorgan Floating

-0.56

Correlation Coefficient

Tekla Healthcare  Jpmorgan Floating

Excellent diversification

The 3 months correlation between Tekla and Jpmorgan is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and Jpmorgan Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jpmorgan Floating Rate 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 Jpmorgan Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jpmorgan Floating Rate has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Jpmorgan Floating go up and down completely randomly.

Pair Corralation between Tekla Healthcare and Jpmorgan Floating

Considering the 90-day investment horizon Tekla Healthcare Opportunities is expected to under-perform the Jpmorgan Floating. In addition to that, Tekla Healthcare is 8.6 times more volatile than Jpmorgan Floating Rate. It trades about -0.02 of its total potential returns per unit of risk. Jpmorgan Floating Rate is currently generating about 0.2 per unit of volatility. If you would invest  839.00  in Jpmorgan Floating Rate on August 31, 2024 and sell it today you would earn a total of  13.00  from holding Jpmorgan Floating Rate or generate 1.55% return on investment over 90 days.

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

Tekla Healthcare Opportunities  vs.  Jpmorgan Floating Rate

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.

Jpmorgan Floating Rate

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jpmorgan Floating Rate are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Jpmorgan Floating is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tekla Healthcare and Jpmorgan Floating

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

The idea behind Tekla Healthcare Opportunities and Jpmorgan Floating Rate 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.