Correlation Between Tela Bio and Clearpoint Neuro

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

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

Diversification Opportunities for Tela Bio and Clearpoint Neuro

-0.93

Correlation Coefficient

Tela Bio  Clearpoint Neuro

Pay attention - limited upside

The 3 months correlation between Tela and Clearpoint is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding Tela Bio and Clearpoint Neuro in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearpoint Neuro and Tela Bio 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 Tela Bio are associated (or correlated) with Clearpoint Neuro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearpoint Neuro has no effect on the direction of Tela Bio i.e., Tela Bio and Clearpoint Neuro go up and down completely randomly.

Pair Corralation between Tela Bio and Clearpoint Neuro

Given the investment horizon of 90 days Tela Bio is expected to generate 1.33 times more return on investment than Clearpoint Neuro. However, Tela Bio is 1.33 times more volatile than Clearpoint Neuro. It trades about -0.13 of its potential returns per unit of risk. Clearpoint Neuro is currently generating about -0.2 per unit of risk. If you would invest  293.00  in Tela Bio on June 29, 2024 and sell it today you would lose (31.00) from holding Tela Bio or give up 10.58% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Tela Bio  vs.  Clearpoint Neuro

Tela Bio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tela Bio has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in October 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Clearpoint Neuro

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Clearpoint Neuro are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Clearpoint Neuro unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Tela Bio and Clearpoint Neuro

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

The idea behind Tela Bio and Clearpoint Neuro 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.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.