Correlation Between Tekla Healthcare and Emerging Markets
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Emerging Markets 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 Emerging Markets 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 Emerging Markets Portfolio, you can compare the effects of market volatilities on Tekla Healthcare and Emerging Markets 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 Emerging Markets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Emerging Markets.
Diversification Opportunities for Tekla Healthcare and Emerging Markets
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Tekla and Emerging is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Investors and Emerging Markets Portfolio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emerging Markets Por 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 Emerging Markets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emerging Markets Por has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Emerging Markets go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Emerging Markets
Assuming the 90 days horizon Tekla Healthcare Investors is expected to under-perform the Emerging Markets. In addition to that, Tekla Healthcare is 1.99 times more volatile than Emerging Markets Portfolio. It trades about 0.0 of its total potential returns per unit of risk. Emerging Markets Portfolio is currently generating about 0.26 per unit of volatility. If you would invest 2,131 in Emerging Markets Portfolio on April 30, 2025 and sell it today you would earn a total of 274.00 from holding Emerging Markets Portfolio or generate 12.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.39% |
| Values | Daily Returns |
Tekla Healthcare Investors vs. Emerging Markets Portfolio
Performance |
| Timeline |
| Tekla Healthcare Inv |
| Emerging Markets Por |
Tekla Healthcare and Emerging Markets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and Emerging Markets
The main advantage of trading using opposite Tekla Healthcare and Emerging Markets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Emerging Markets 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 Emerging Markets will offset losses from the drop in Emerging Markets' long position.| Tekla Healthcare vs. Virtus Convertible | Tekla Healthcare vs. Rationalpier 88 Convertible | Tekla Healthcare vs. Putnam Convertible Securities | Tekla Healthcare vs. Absolute Convertible Arbitrage |
| Emerging Markets vs. Victory Diversified Stock | Emerging Markets vs. Elfun Diversified Fund | Emerging Markets vs. Timothy Plan Conservative | Emerging Markets vs. Madison Diversified Income |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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