Correlation Between Teleflex Incorporated and GlucoTrack

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

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

Diversification Opportunities for Teleflex Incorporated and GlucoTrack

0.92

Correlation Coefficient

Teleflex Incorporated  GlucoTrack

Almost no diversification

The 3 months correlation between Teleflex and GlucoTrack is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Teleflex Incorporated and GlucoTrack in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GlucoTrack 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 GlucoTrack. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GlucoTrack has no effect on the direction of Teleflex Incorporated i.e., Teleflex Incorporated and GlucoTrack go up and down completely randomly.

Pair Corralation between Teleflex Incorporated and GlucoTrack

Considering the 90-day investment horizon Teleflex Incorporated is expected to generate 0.18 times more return on investment than GlucoTrack. However, Teleflex Incorporated is 5.56 times less risky than GlucoTrack. It trades about -0.26 of its potential returns per unit of risk. GlucoTrack is currently generating about -0.26 per unit of risk. If you would invest  23,621  in Teleflex Incorporated on August 27, 2024 and sell it today you would lose (4,450) from holding Teleflex Incorporated or give up 18.84% of portfolio value over 90 days.

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

Teleflex Incorporated  vs.  GlucoTrack

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 uncertain performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

GlucoTrack

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GlucoTrack has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in December 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Teleflex Incorporated and GlucoTrack

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

The idea behind Teleflex Incorporated and GlucoTrack 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.