Correlation Between Teleflex Incorporated and MicroStrategy Incorporated

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

By analyzing existing cross correlation between Teleflex Incorporated and MicroStrategy Incorporated 1000, you can compare the effects of market volatilities on Teleflex Incorporated and MicroStrategy Incorporated 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 MicroStrategy Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teleflex Incorporated and MicroStrategy Incorporated.

Diversification Opportunities for Teleflex Incorporated and MicroStrategy Incorporated

-0.69

Correlation Coefficient

Teleflex Incorporated  MicroStrategy Incorporated

Excellent diversification

The 3 months correlation between Teleflex and MicroStrategy is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Teleflex Incorporated and MicroStrategy Incorporated 100 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroStrategy Incorporated 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 MicroStrategy Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroStrategy Incorporated has no effect on the direction of Teleflex Incorporated i.e., Teleflex Incorporated and MicroStrategy Incorporated go up and down completely randomly.

Pair Corralation between Teleflex Incorporated and MicroStrategy Incorporated

Considering the 90-day investment horizon Teleflex Incorporated is expected to under-perform the MicroStrategy Incorporated. But the stock apears to be less risky and, when comparing its historical volatility, Teleflex Incorporated is 1.07 times less risky than MicroStrategy Incorporated. The stock trades about -0.04 of its potential returns per unit of risk. The MicroStrategy Incorporated 1000 is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  9,553  in MicroStrategy Incorporated 1000 on May 16, 2025 and sell it today you would earn a total of  2,155  from holding MicroStrategy Incorporated 1000 or generate 22.56% return on investment over 90 days.

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

Teleflex Incorporated  vs.  MicroStrategy Incorporated 100

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.

MicroStrategy Incorporated

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MicroStrategy Incorporated 1000 are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, MicroStrategy Incorporated reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Teleflex Incorporated and MicroStrategy Incorporated

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

The idea behind Teleflex Incorporated and MicroStrategy Incorporated 1000 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.