Correlation Between Tekla Healthcare and Riskproreg

Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Riskproreg 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 Riskproreg 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 Riskproreg 30 Fund, you can compare the effects of market volatilities on Tekla Healthcare and Riskproreg 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 Riskproreg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Riskproreg.

Diversification Opportunities for Tekla Healthcare and Riskproreg

0.01

Correlation Coefficient

Tekla Healthcare  Riskproreg

Significant diversification

The 3 months correlation between Tekla and Riskproreg is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and Riskproreg 30 Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Riskproreg 30 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 Riskproreg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Riskproreg 30 has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Riskproreg go up and down completely randomly.

Pair Corralation between Tekla Healthcare and Riskproreg

Considering the 90-day investment horizon Tekla Healthcare is expected to generate 1.85 times less return on investment than Riskproreg. In addition to that, Tekla Healthcare is 1.19 times more volatile than Riskproreg 30 Fund. It trades about 0.03 of its total potential returns per unit of risk. Riskproreg 30 Fund is currently generating about 0.07 per unit of volatility. If you would invest  1,095  in Riskproreg 30 Fund on October 4, 2024 and sell it today you would earn a total of  310.00  from holding Riskproreg 30 Fund or generate 28.31% return on investment over 90 days.

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

Tekla Healthcare Opportunities  vs.  Riskproreg 30 Fund

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 inconsistent performance in the last few months, the Fund's technical indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the fund retail investors.

Riskproreg 30

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Riskproreg 30 Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Riskproreg 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 Riskproreg

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

The idea behind Tekla Healthcare Opportunities and Riskproreg 30 Fund 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.