Correlation Between Tekla Healthcare and Ab E

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

Diversification Opportunities for Tekla Healthcare and Ab E

0.26

Correlation Coefficient

Tekla Healthcare  Ab E

Modest diversification

The 3 months correlation between Tekla and ADGAX is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Investors and Ab E Opportunities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab E Opportunities 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 Ab E. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab E Opportunities has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Ab E go up and down completely randomly.

Pair Corralation between Tekla Healthcare and Ab E

Assuming the 90 days horizon Tekla Healthcare Investors is expected to under-perform the Ab E. In addition to that, Tekla Healthcare is 1.9 times more volatile than Ab E Opportunities. It trades about -0.03 of its total potential returns per unit of risk. Ab E Opportunities is currently generating about 0.25 per unit of volatility. If you would invest  2,243  in Ab E Opportunities on May 5, 2025 and sell it today you would earn a total of  296.00  from holding Ab E Opportunities or generate 13.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Tekla Healthcare Investors  vs.  Ab E Opportunities

Tekla Healthcare Inv

Risk-Adjusted Performance

Very Weak

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

Ab E Opportunities

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Ab E Opportunities are ranked lower than 19 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Ab E may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Tekla Healthcare and Ab E

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

The idea behind Tekla Healthcare Investors and Ab E Opportunities 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 Global Correlations module to find global opportunities by holding instruments from different markets.