Correlation Between Teleflex Incorporated and SurModics

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

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

Diversification Opportunities for Teleflex Incorporated and SurModics

-0.57

Correlation Coefficient

Teleflex Incorporated  SurModics

Excellent diversification

The 3 months correlation between Teleflex and SurModics is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Teleflex Incorporated and SurModics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SurModics 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 SurModics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SurModics has no effect on the direction of Teleflex Incorporated i.e., Teleflex Incorporated and SurModics go up and down completely randomly.

Pair Corralation between Teleflex Incorporated and SurModics

Considering the 90-day investment horizon Teleflex Incorporated is expected to generate 1.6 times more return on investment than SurModics. However, Teleflex Incorporated is 1.6 times more volatile than SurModics. It trades about -0.08 of its potential returns per unit of risk. SurModics is currently generating about -0.19 per unit of risk. If you would invest  24,181  in Teleflex Incorporated on July 28, 2024 and sell it today you would lose (818.00) from holding Teleflex Incorporated or give up 3.38% of portfolio value over 90 days.

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

Teleflex Incorporated  vs.  SurModics

Teleflex Incorporated

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Teleflex Incorporated are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. 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.

SurModics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SurModics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Teleflex Incorporated and SurModics

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

The idea behind Teleflex Incorporated and SurModics 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.