Correlation Between Interface and Treace Medical

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

By analyzing existing cross correlation between Interface and Treace Medical Concepts, you can compare the effects of market volatilities on Interface and Treace Medical 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 Interface with a short position of Treace Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Interface and Treace Medical.

Diversification Opportunities for Interface and Treace Medical

-0.36

Correlation Coefficient

Interface  Treace Medical

Very good diversification

The 3 months correlation between Interface and Treace is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Interface and Treace Medical Concepts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Treace Medical Concepts and Interface 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 Interface are associated (or correlated) with Treace Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Treace Medical Concepts has no effect on the direction of Interface i.e., Interface and Treace Medical go up and down completely randomly.

Pair Corralation between Interface and Treace Medical

Given the investment horizon of 90 days Interface is expected to generate 1.02 times more return on investment than Treace Medical. However, Interface is 1.02 times more volatile than Treace Medical Concepts. It trades about 0.15 of its potential returns per unit of risk. Treace Medical Concepts is currently generating about -0.15 per unit of risk. If you would invest  1,914  in Interface on May 5, 2025 and sell it today you would earn a total of  547.00  from holding Interface or generate 28.58% return on investment over 90 days.

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

Interface  vs.  Treace Medical Concepts

Interface

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Interface are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting essential indicators, Interface exhibited solid returns over the last few months and may actually be approaching a breakup point.

Treace Medical Concepts

Risk-Adjusted Performance

Very Weak

Over the last 90 days Treace Medical Concepts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in September 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Interface and Treace Medical

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

The idea behind Interface and Treace Medical Concepts 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.