Correlation Between Teleflex Incorporated and Stryker
Can any of the company-specific risk be diversified away by investing in both Teleflex Incorporated and Stryker 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 Stryker into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teleflex Incorporated and Stryker, you can compare the effects of market volatilities on Teleflex Incorporated and Stryker 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 Stryker. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teleflex Incorporated and Stryker.
Diversification Opportunities for Teleflex Incorporated and Stryker
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Teleflex and Stryker is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Teleflex Incorporated and Stryker in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stryker 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 Stryker. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stryker has no effect on the direction of Teleflex Incorporated i.e., Teleflex Incorporated and Stryker go up and down completely randomly.
Pair Corralation between Teleflex Incorporated and Stryker
Considering the 90-day investment horizon Teleflex Incorporated is expected to under-perform the Stryker. In addition to that, Teleflex Incorporated is 1.23 times more volatile than Stryker. It trades about -0.02 of its total potential returns per unit of risk. Stryker is currently generating about 0.05 per unit of volatility. If you would invest 22,917 in Stryker on January 20, 2024 and sell it today you would earn a total of 9,828 from holding Stryker or generate 42.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Teleflex Incorporated vs. Stryker
Performance |
| Timeline |
| Teleflex Incorporated |
| Stryker |
Teleflex Incorporated and Stryker Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teleflex Incorporated and Stryker
The main advantage of trading using opposite Teleflex Incorporated and Stryker positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teleflex Incorporated position performs unexpectedly, Stryker 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 Stryker will offset losses from the drop in Stryker's long position.| Teleflex Incorporated vs. Agilent Technologies | Teleflex Incorporated vs. Illumina | Teleflex Incorporated vs. Waters | Teleflex Incorporated vs. Thermo Fisher Scientific |
| Stryker vs. Agilent Technologies | Stryker vs. Illumina | Stryker vs. Waters | Stryker vs. Thermo Fisher Scientific |
Check out your portfolio center.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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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