Correlation Between Tekla Healthcare and Schwab Treasury

Can any of the company-specific risk be diversified away by investing in both Tekla Healthcare and Schwab Treasury 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 Schwab Treasury 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 Schwab Treasury Money, you can compare the effects of market volatilities on Tekla Healthcare and Schwab Treasury 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 Schwab Treasury. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tekla Healthcare and Schwab Treasury.

Diversification Opportunities for Tekla Healthcare and Schwab Treasury

0.0

Correlation Coefficient

Tekla Healthcare  Schwab Treasury

Pay attention - limited upside

The 3 months correlation between Tekla and Schwab is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and Schwab Treasury Money in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schwab Treasury Money 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 Schwab Treasury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schwab Treasury Money has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Schwab Treasury go up and down completely randomly.

Pair Corralation between Tekla Healthcare and Schwab Treasury

If you would invest  100.00  in Schwab Treasury Money on September 23, 2024 and sell it today you would earn a total of  0.00  from holding Schwab Treasury Money or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.48%
Values	Daily Returns

Tekla Healthcare Opportunities  vs.  Schwab Treasury Money

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 inconsistent performance in the last few months, the Fund's technical indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the fund retail investors.

Schwab Treasury Money

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Tekla Healthcare and Schwab Treasury

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

The idea behind Tekla Healthcare Opportunities and Schwab Treasury Money 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.

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 Equity Valuation module to check real value of public entities based on technical and fundamental data.