Correlation Between Tekla Healthcare and Old Westbury

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

Diversification Opportunities for Tekla Healthcare and Old Westbury

0.22

Correlation Coefficient

Tekla Healthcare  Old Westbury

Modest diversification

The 3 months correlation between Tekla and Old is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Tekla Healthcare Investors and Old Westbury Large in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Old Westbury Large 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 Old Westbury. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Old Westbury Large has no effect on the direction of Tekla Healthcare i.e., Tekla Healthcare and Old Westbury go up and down completely randomly.

Pair Corralation between Tekla Healthcare and Old Westbury

Assuming the 90 days horizon Tekla Healthcare Investors is expected to under-perform the Old Westbury. In addition to that, Tekla Healthcare is 2.62 times more volatile than Old Westbury Large. It trades about -0.03 of its total potential returns per unit of risk. Old Westbury Large is currently generating about 0.26 per unit of volatility. If you would invest  1,976  in Old Westbury Large on May 5, 2025 and sell it today you would earn a total of  192.00  from holding Old Westbury Large or generate 9.72% 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.  Old Westbury Large

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.

Old Westbury Large

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Old Westbury Large are ranked lower than 20 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Old Westbury may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Pair Trading with Tekla Healthcare and Old Westbury

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

The idea behind Tekla Healthcare Investors and Old Westbury Large 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.