Correlation Between Teleflex Incorporated and SEMPRA

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

By analyzing existing cross correlation between Teleflex Incorporated and SEMPRA ENERGY 325, you can compare the effects of market volatilities on Teleflex Incorporated and SEMPRA 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 SEMPRA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teleflex Incorporated and SEMPRA.

Diversification Opportunities for Teleflex Incorporated and SEMPRA

0.65

Correlation Coefficient

Teleflex Incorporated  SEMPRA

Poor diversification

The 3 months correlation between Teleflex and SEMPRA is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Teleflex Incorporated and SEMPRA ENERGY 325 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEMPRA ENERGY 325 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 SEMPRA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEMPRA ENERGY 325 has no effect on the direction of Teleflex Incorporated i.e., Teleflex Incorporated and SEMPRA go up and down completely randomly.

Pair Corralation between Teleflex Incorporated and SEMPRA

Considering the 90-day investment horizon Teleflex Incorporated is expected to under-perform the SEMPRA. In addition to that, Teleflex Incorporated is 4.79 times more volatile than SEMPRA ENERGY 325. It trades about -0.03 of its total potential returns per unit of risk. SEMPRA ENERGY 325 is currently generating about -0.01 per unit of volatility. If you would invest  9,375  in SEMPRA ENERGY 325 on September 4, 2024 and sell it today you would lose (72.00) from holding SEMPRA ENERGY 325 or give up 0.77% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	88.66%
Values	Daily Returns

Teleflex Incorporated  vs.  SEMPRA ENERGY 325

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 weak 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.

SEMPRA ENERGY 325

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SEMPRA ENERGY 325 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SEMPRA is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Teleflex Incorporated and SEMPRA

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

The idea behind Teleflex Incorporated and SEMPRA ENERGY 325 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.