Correlation Between Teleflex Incorporated and 06051GLE7

Can any of the company-specific risk be diversified away by investing in both Teleflex Incorporated and 06051GLE7 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 Teleflex Incorporated and 06051GLE7 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Teleflex Incorporated and BAC 508 20 JAN 27, you can compare the effects of market volatilities on Teleflex Incorporated and 06051GLE7 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 Teleflex Incorporated with a short position of 06051GLE7. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teleflex Incorporated and 06051GLE7.

Diversification Opportunities for Teleflex Incorporated and 06051GLE7

0.71

Correlation Coefficient

Teleflex Incorporated  06051GLE7

Poor diversification

The 3 months correlation between Teleflex and 06051GLE7 is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Teleflex Incorporated and BAC 508 20 JAN 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAC 508 20 and Teleflex Incorporated 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 Teleflex Incorporated are associated (or correlated) with 06051GLE7. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAC 508 20 has no effect on the direction of Teleflex Incorporated i.e., Teleflex Incorporated and 06051GLE7 go up and down completely randomly.

Pair Corralation between Teleflex Incorporated and 06051GLE7

Considering the 90-day investment horizon Teleflex Incorporated is expected to under-perform the 06051GLE7. In addition to that, Teleflex Incorporated is 11.24 times more volatile than BAC 508 20 JAN 27. It trades about -0.21 of its total potential returns per unit of risk. BAC 508 20 JAN 27 is currently generating about -0.1 per unit of volatility. If you would invest  10,057  in BAC 508 20 JAN 27 on September 13, 2024 and sell it today you would lose (97.00) from holding BAC 508 20 JAN 27 or give up 0.96% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	90.7%
Values	Daily Returns

Teleflex Incorporated  vs.  BAC 508 20 JAN 27

Teleflex Incorporated

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Teleflex Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

BAC 508 20

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BAC 508 20 JAN 27 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 06051GLE7 is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Teleflex Incorporated and 06051GLE7

The main advantage of trading using opposite Teleflex Incorporated and 06051GLE7 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teleflex Incorporated position performs unexpectedly, 06051GLE7 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 06051GLE7 will offset losses from the drop in 06051GLE7's long position.

The idea behind Teleflex Incorporated and BAC 508 20 JAN 27 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.