Correlation Between Tekla Healthcare and Blackrock Intern

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

Diversification Opportunities for Tekla Healthcare and Blackrock Intern

0.83

Correlation Coefficient

Tekla Healthcare  Blackrock Intern

Very poor diversification

The 3 months correlation between Tekla and Blackrock is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and Blackrock Intern Index in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackrock Intern Index 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 Blackrock Intern. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackrock Intern Index has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Blackrock Intern go up and down completely randomly.

Pair Corralation between Tekla Healthcare and Blackrock Intern

Considering the 90-day investment horizon Tekla Healthcare Opportunities is expected to under-perform the Blackrock Intern. In addition to that, Tekla Healthcare is 1.18 times more volatile than Blackrock Intern Index. It trades about -0.12 of its total potential returns per unit of risk. Blackrock Intern Index is currently generating about -0.11 per unit of volatility. If you would invest  1,666  in Blackrock Intern Index on September 15, 2024 and sell it today you would lose (108.00) from holding Blackrock Intern Index or give up 6.48% of portfolio value over 90 days.

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

Tekla Healthcare Opportunities  vs.  Blackrock Intern Index

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 latest inconsistent performance, the Fund's technical indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the fund retail investors.

Blackrock Intern Index

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Blackrock Intern Index has generated negative risk-adjusted returns adding no value to fund investors. In spite of latest weak performance, the Fund's forward indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Pair Trading with Tekla Healthcare and Blackrock Intern

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

The idea behind Tekla Healthcare Opportunities and Blackrock Intern Index 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.