Correlation Between Tekla Healthcare and Ohio Variable

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

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

Diversification Opportunities for Tekla Healthcare and Ohio Variable

0.08

Correlation Coefficient

Tekla Healthcare  Ohio Variable

Significant diversification

The 3 months correlation between Tekla and Ohio is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and Ohio Variable College in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ohio Variable College 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 Opportunities are associated (or correlated) with Ohio Variable. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ohio Variable College has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Ohio Variable go up and down completely randomly.

Pair Corralation between Tekla Healthcare and Ohio Variable

Considering the 90-day investment horizon Tekla Healthcare is expected to generate 1.2 times less return on investment than Ohio Variable. In addition to that, Tekla Healthcare is 1.89 times more volatile than Ohio Variable College. It trades about 0.04 of its total potential returns per unit of risk. Ohio Variable College is currently generating about 0.08 per unit of volatility. If you would invest  1,217  in Ohio Variable College on September 28, 2024 and sell it today you would earn a total of  256.00  from holding Ohio Variable College or generate 21.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.4%
Values	Daily Returns

Tekla Healthcare Opportunities  vs.  Ohio Variable College

Tekla Healthcare Opp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tekla Healthcare Opportunities has generated negative risk-adjusted returns adding no value to fund investors. Even with latest inconsistent performance, the Fund's technical indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the fund retail investors.

Ohio Variable College

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ohio Variable College has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong fundamental indicators, Ohio Variable is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Tekla Healthcare and Ohio Variable

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

The idea behind Tekla Healthcare Opportunities and Ohio Variable College 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.