Correlation Between Ecolab and Teleflex Incorporated

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

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

Diversification Opportunities for Ecolab and Teleflex Incorporated

-0.5

Correlation Coefficient

Ecolab  Teleflex Incorporated

Very good diversification

The 3 months correlation between Ecolab and Teleflex is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Ecolab Inc and Teleflex Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teleflex Incorporated and Ecolab 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 Ecolab Inc are associated (or correlated) with Teleflex Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teleflex Incorporated has no effect on the direction of Ecolab i.e., Ecolab and Teleflex Incorporated go up and down completely randomly.

Pair Corralation between Ecolab and Teleflex Incorporated

Considering the 90-day investment horizon Ecolab Inc is expected to generate 0.57 times more return on investment than Teleflex Incorporated. However, Ecolab Inc is 1.75 times less risky than Teleflex Incorporated. It trades about 0.15 of its potential returns per unit of risk. Teleflex Incorporated is currently generating about -0.04 per unit of risk. If you would invest  24,954  in Ecolab Inc on May 14, 2025 and sell it today you would earn a total of  2,333  from holding Ecolab Inc or generate 9.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Ecolab Inc  vs.  Teleflex Incorporated

Ecolab Inc

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Ecolab Inc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating fundamental indicators, Ecolab may actually be approaching a critical reversion point that can send shares even higher in September 2025.

Teleflex Incorporated

Risk-Adjusted Performance

Weakest

Over the last 90 days Teleflex Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Teleflex Incorporated is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Ecolab and Teleflex Incorporated

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

The idea behind Ecolab Inc and Teleflex Incorporated 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.