Correlation Between XAI Octagon and Tekla Healthcare
Can any of the company-specific risk be diversified away by investing in both XAI Octagon 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 XAI Octagon and Tekla Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XAI Octagon Floating and Tekla Healthcare Investors, you can compare the effects of market volatilities on XAI Octagon 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 XAI Octagon with a short position of Tekla Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of XAI Octagon and Tekla Healthcare.
Diversification Opportunities for XAI Octagon and Tekla Healthcare
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between XAI and Tekla is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding XAI Octagon Floating 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 XAI Octagon 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 XAI Octagon Floating 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 XAI Octagon i.e., XAI Octagon and Tekla Healthcare go up and down completely randomly.
Pair Corralation between XAI Octagon and Tekla Healthcare
Given the investment horizon of 90 days XAI Octagon Floating is expected to under-perform the Tekla Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, XAI Octagon Floating is 1.24 times less risky than Tekla Healthcare. The stock trades about -0.17 of its potential returns per unit of risk. The Tekla Healthcare Investors is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,603 in Tekla Healthcare Investors on December 26, 2024 and sell it today you would earn a total of 55.00 from holding Tekla Healthcare Investors or generate 3.43% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
XAI Octagon Floating vs. Tekla Healthcare Investors
Performance |
Timeline |
XAI Octagon Floating |
Tekla Healthcare Inv |
XAI Octagon and Tekla Healthcare Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with XAI Octagon and Tekla Healthcare
The main advantage of trading using opposite XAI Octagon and Tekla Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XAI Octagon 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.XAI Octagon vs. Oxford Lane Capital | XAI Octagon vs. Capital Southwest | XAI Octagon vs. Cornerstone Strategic Return | XAI Octagon vs. Cornerstone Strategic Value |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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