Correlation Between Teleflex Incorporated and ECD Automotive

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

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

Diversification Opportunities for Teleflex Incorporated and ECD Automotive

0.62

Correlation Coefficient

Teleflex Incorporated  ECD Automotive

Poor diversification

The 3 months correlation between Teleflex and ECD is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Teleflex Incorporated and ECD Automotive Design in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECD Automotive Design 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 ECD Automotive. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECD Automotive Design has no effect on the direction of Teleflex Incorporated i.e., Teleflex Incorporated and ECD Automotive go up and down completely randomly.

Pair Corralation between Teleflex Incorporated and ECD Automotive

Considering the 90-day investment horizon Teleflex Incorporated is expected to generate 0.22 times more return on investment than ECD Automotive. However, Teleflex Incorporated is 4.5 times less risky than ECD Automotive. It trades about -0.04 of its potential returns per unit of risk. ECD Automotive Design is currently generating about -0.1 per unit of risk. If you would invest  12,615  in Teleflex Incorporated on May 15, 2025 and sell it today you would lose (651.00) from holding Teleflex Incorporated or give up 5.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Teleflex Incorporated  vs.  ECD Automotive Design

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.

ECD Automotive Design

Risk-Adjusted Performance

Weakest

Over the last 90 days ECD Automotive Design has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Teleflex Incorporated and ECD Automotive

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

The idea behind Teleflex Incorporated and ECD Automotive Design 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.