Correlation Between Tekla Healthcare and Dreyfus Natural
Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Dreyfus Natural 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 Dreyfus Natural 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 Dreyfus Natural Resources, you can compare the effects of market volatilities on Tekla Healthcare and Dreyfus Natural 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 Dreyfus Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Dreyfus Natural.
Diversification Opportunities for Tekla Healthcare and Dreyfus Natural
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Tekla and Dreyfus is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and Dreyfus Natural Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dreyfus Natural Resources 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 Dreyfus Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dreyfus Natural Resources has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Dreyfus Natural go up and down completely randomly.
Pair Corralation between Tekla Healthcare and Dreyfus Natural
Considering the 90-day investment horizon Tekla Healthcare Opportunities is expected to under-perform the Dreyfus Natural. But the fund apears to be less risky and, when comparing its historical volatility, Tekla Healthcare Opportunities is 1.34 times less risky than Dreyfus Natural. The fund trades about -0.14 of its potential returns per unit of risk. The Dreyfus Natural Resources is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 4,095 in Dreyfus Natural Resources on September 18, 2024 and sell it today you would lose (249.00) from holding Dreyfus Natural Resources or give up 6.08% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Tekla Healthcare Opportunities vs. Dreyfus Natural Resources
Performance |
Timeline |
Tekla Healthcare Opp |
Dreyfus Natural Resources |
Tekla Healthcare and Dreyfus Natural Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tekla Healthcare and Dreyfus Natural
The main advantage of trading using opposite Tekla Healthcare and Dreyfus Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tekla Healthcare position performs unexpectedly, Dreyfus Natural 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 Dreyfus Natural will offset losses from the drop in Dreyfus Natural's long position.Tekla Healthcare vs. Tekla Healthcare Investors | Tekla Healthcare vs. Tekla Life Sciences | Tekla Healthcare vs. Cohen Steers Reit | Tekla Healthcare vs. XAI Octagon Floating |
Dreyfus Natural vs. Vanguard Health Care | Dreyfus Natural vs. Tekla Healthcare Opportunities | Dreyfus Natural vs. Blackrock Health Sciences | Dreyfus Natural vs. Fidelity Advisor Health |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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