Correlation Between Tekla Healthcare and Aggressive Investors

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

By analyzing existing cross correlation between Tekla Healthcare Investors and Aggressive Investors 1, you can compare the effects of market volatilities on Tekla Healthcare and Aggressive Investors 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 Aggressive Investors. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Aggressive Investors.

Diversification Opportunities for Tekla Healthcare and Aggressive Investors

-0.38

Correlation Coefficient

Tekla Healthcare  Aggressive Investors

Very good diversification

The 3 months correlation between Tekla and Aggressive is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Investors and Aggressive Investors 1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aggressive Investors 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 Investors are associated (or correlated) with Aggressive Investors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aggressive Investors has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Aggressive Investors go up and down completely randomly.

Pair Corralation between Tekla Healthcare and Aggressive Investors

Assuming the 90 days horizon Tekla Healthcare Investors is expected to under-perform the Aggressive Investors. But the mutual fund apears to be less risky and, when comparing its historical volatility, Tekla Healthcare Investors is 1.02 times less risky than Aggressive Investors. The mutual fund trades about -0.14 of its potential returns per unit of risk. The Aggressive Investors 1 is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  9,363  in Aggressive Investors 1 on October 23, 2024 and sell it today you would earn a total of  746.00  from holding Aggressive Investors 1 or generate 7.97% return on investment over 90 days.

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

Tekla Healthcare Investors  vs.  Aggressive Investors 1

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 fund investors. In spite of latest weak performance, the Fund's technical indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the fund investors.

Aggressive Investors

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Aggressive Investors 1 are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak technical and fundamental indicators, Aggressive Investors may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Tekla Healthcare and Aggressive Investors

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

The idea behind Tekla Healthcare Investors and Aggressive Investors 1 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.