Correlation Between Teleflex Incorporated and Spectrum Technology

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

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

Diversification Opportunities for Teleflex Incorporated and Spectrum Technology

0.61

Correlation Coefficient

Teleflex Incorporated  Spectrum Technology

Poor diversification

The 3 months correlation between Teleflex and Spectrum is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Teleflex Incorporated and Spectrum Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectrum Technology 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 Spectrum Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectrum Technology has no effect on the direction of Teleflex Incorporated i.e., Teleflex Incorporated and Spectrum Technology go up and down completely randomly.

Pair Corralation between Teleflex Incorporated and Spectrum Technology

Considering the 90-day investment horizon Teleflex Incorporated is expected to generate 0.15 times more return on investment than Spectrum Technology. However, Teleflex Incorporated is 6.82 times less risky than Spectrum Technology. It trades about -0.04 of its potential returns per unit of risk. Spectrum Technology is currently generating about -0.13 per unit of risk. If you would invest  12,743  in Teleflex Incorporated on May 18, 2025 and sell it today you would lose (675.00) from holding Teleflex Incorporated or give up 5.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Teleflex Incorporated  vs.  Spectrum Technology

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.

Spectrum Technology

Risk-Adjusted Performance

Weakest

Over the last 90 days Spectrum Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in September 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Teleflex Incorporated and Spectrum Technology

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

The idea behind Teleflex Incorporated and Spectrum Technology 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.