Correlation Between Tekla Healthcare and Largecap Value
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Largecap Value 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 Largecap Value 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 Largecap Value Fund, you can compare the effects of market volatilities on Tekla Healthcare and Largecap Value 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 Largecap Value. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Largecap Value.
Diversification Opportunities for Tekla Healthcare and Largecap Value
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Tekla and Largecap is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Investors and Largecap Value Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Largecap Value 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 Largecap Value. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Largecap Value has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Largecap Value go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Largecap Value
Assuming the 90 days horizon Tekla Healthcare is expected to generate 1.19 times less return on investment than Largecap Value. In addition to that, Tekla Healthcare is 1.74 times more volatile than Largecap Value Fund. It trades about 0.1 of its total potential returns per unit of risk. Largecap Value Fund is currently generating about 0.2 per unit of volatility. If you would invest 1,891 in Largecap Value Fund on May 31, 2025 and sell it today you would earn a total of 154.00 from holding Largecap Value Fund or generate 8.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 98.41% |
| Values | Daily Returns |
Tekla Healthcare Investors vs. Largecap Value Fund
Performance |
| Timeline |
| Tekla Healthcare Inv |
| Largecap Value |
Tekla Healthcare and Largecap Value Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tekla Healthcare and Largecap Value
The main advantage of trading using opposite Tekla Healthcare and Largecap Value positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Largecap Value 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 Largecap Value will offset losses from the drop in Largecap Value's long position.| Tekla Healthcare vs. Vanguard Total Stock | Tekla Healthcare vs. Vanguard 500 Index | Tekla Healthcare vs. Vanguard Total Stock | Tekla Healthcare vs. Vanguard Total Stock |
| Largecap Value vs. Prudential High Yield | Largecap Value vs. Ab High Income | Largecap Value vs. Multi Manager High Yield | Largecap Value vs. Payden High 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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