Correlation Between Teladoc Health and ArcelorMittal

Can any of the company-specific risk be diversified away by investing in both Teladoc Health and ArcelorMittal 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 Teladoc Health and ArcelorMittal into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Teladoc Health and ArcelorMittal SA, you can compare the effects of market volatilities on Teladoc Health and ArcelorMittal 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 Teladoc Health with a short position of ArcelorMittal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teladoc Health and ArcelorMittal.

Diversification Opportunities for Teladoc Health and ArcelorMittal

0.72

Correlation Coefficient

Teladoc Health  ArcelorMittal

Poor diversification

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

Pair Corralation between Teladoc Health and ArcelorMittal

Assuming the 90 days trading horizon Teladoc Health is expected to generate 2.26 times more return on investment than ArcelorMittal. However, Teladoc Health is 2.26 times more volatile than ArcelorMittal SA. It trades about 0.19 of its potential returns per unit of risk. ArcelorMittal SA is currently generating about 0.17 per unit of risk. If you would invest  142.00  in Teladoc Health on September 4, 2024 and sell it today you would earn a total of  92.00  from holding Teladoc Health or generate 64.79% return on investment over 90 days.

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

Teladoc Health  vs.  ArcelorMittal SA

Teladoc Health

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Teladoc Health are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Teladoc Health sustained solid returns over the last few months and may actually be approaching a breakup point.

ArcelorMittal SA

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in ArcelorMittal SA are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak primary indicators, ArcelorMittal sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Teladoc Health and ArcelorMittal

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

The idea behind Teladoc Health and ArcelorMittal SA 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.