Correlation Between Tekla Healthcare and Nuveen Georgia

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

Diversification Opportunities for Tekla Healthcare and Nuveen Georgia

-0.72

Correlation Coefficient

Tekla Healthcare  Nuveen Georgia

Pay attention - limited upside

The 3 months correlation between Tekla and Nuveen is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Opportunities and Nuveen Georgia Quality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Georgia Quality 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 Nuveen Georgia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Georgia Quality has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Nuveen Georgia go up and down completely randomly.

Pair Corralation between Tekla Healthcare and Nuveen Georgia

Considering the 90-day investment horizon Tekla Healthcare Opportunities is expected to generate 2.76 times more return on investment than Nuveen Georgia. However, Tekla Healthcare is 2.76 times more volatile than Nuveen Georgia Quality. It trades about 0.04 of its potential returns per unit of risk. Nuveen Georgia Quality is currently generating about 0.01 per unit of risk. If you would invest  1,671  in Tekla Healthcare Opportunities on September 29, 2024 and sell it today you would earn a total of  258.00  from holding Tekla Healthcare Opportunities or generate 15.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	19.56%
Values	Daily Returns

Tekla Healthcare Opportunities  vs.  Nuveen Georgia Quality

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.

Nuveen Georgia Quality

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nuveen Georgia Quality has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong technical and fundamental indicators, Nuveen Georgia 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 Nuveen Georgia

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

The idea behind Tekla Healthcare Opportunities and Nuveen Georgia Quality 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.