Correlation Between Via Renewables and Tekla Healthcare

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

By analyzing existing cross correlation between Via Renewables and Tekla Healthcare Investors, you can compare the effects of market volatilities on Via Renewables and Tekla Healthcare 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 Via Renewables with a short position of Tekla Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Via Renewables and Tekla Healthcare.

Diversification Opportunities for Via Renewables and Tekla Healthcare

-0.87

Correlation Coefficient

Via Renewables  Tekla Healthcare

Pay attention - limited upside

The 3 months correlation between Via and Tekla is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Via Renewables and Tekla Healthcare Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tekla Healthcare Inv and Via Renewables 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 Via Renewables are associated (or correlated) with Tekla Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tekla Healthcare Inv has no effect on the direction of Via Renewables i.e., Via Renewables and Tekla Healthcare go up and down completely randomly.

Pair Corralation between Via Renewables and Tekla Healthcare

Assuming the 90 days horizon Via Renewables is expected to generate 0.69 times more return on investment than Tekla Healthcare. However, Via Renewables is 1.45 times less risky than Tekla Healthcare. It trades about 0.47 of its potential returns per unit of risk. Tekla Healthcare Investors is currently generating about -0.4 per unit of risk. If you would invest  2,149  in Via Renewables on October 3, 2024 and sell it today you would earn a total of  156.00  from holding Via Renewables or generate 7.26% return on investment over 90 days.

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

Via Renewables  vs.  Tekla Healthcare Investors

Via Renewables

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Via Renewables are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Even with relatively unsteady basic indicators, Via Renewables reported solid returns over the last few months and may actually be approaching a breakup point.

Tekla Healthcare Inv

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tekla Healthcare Investors has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest abnormal performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Via Renewables and Tekla Healthcare

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

The idea behind Via Renewables and Tekla Healthcare Investors 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.