Correlation Between Guardant Health and Teleflex Incorporated
Can any of the company-specific risk be diversified away by investing in both Guardant Health and Teleflex 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 Guardant Health and Teleflex Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guardant Health and Teleflex Incorporated, you can compare the effects of market volatilities on Guardant Health and Teleflex 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 Guardant Health with a short position of Teleflex Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guardant Health and Teleflex Incorporated.
Diversification Opportunities for Guardant Health and Teleflex Incorporated
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Guardant and Teleflex is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Guardant Health and Teleflex Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teleflex Incorporated and Guardant Health 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 Guardant Health are associated (or correlated) with Teleflex Incorporated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teleflex Incorporated has no effect on the direction of Guardant Health i.e., Guardant Health and Teleflex Incorporated go up and down completely randomly.
Pair Corralation between Guardant Health and Teleflex Incorporated
Allowing for the 90-day total investment horizon Guardant Health is expected to generate 1.65 times more return on investment than Teleflex Incorporated. However, Guardant Health is 1.65 times more volatile than Teleflex Incorporated. It trades about 0.21 of its potential returns per unit of risk. Teleflex Incorporated is currently generating about 0.04 per unit of risk. If you would invest 4,579 in Guardant Health on June 3, 2025 and sell it today you would earn a total of 2,163 from holding Guardant Health or generate 47.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guardant Health vs. Teleflex Incorporated
Performance |
| Timeline |
| Guardant Health |
| Teleflex Incorporated |
Guardant Health and Teleflex Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guardant Health and Teleflex Incorporated
The main advantage of trading using opposite Guardant Health and Teleflex Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guardant Health position performs unexpectedly, Teleflex 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 Teleflex Incorporated will offset losses from the drop in Teleflex Incorporated's long position.The idea behind Guardant Health and Teleflex Incorporated 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.| Teleflex Incorporated vs. West Pharmaceutical Services | Teleflex Incorporated vs. Alcon AG | Teleflex Incorporated vs. ResMed Inc | Teleflex Incorporated vs. ICU Medical |
Check out your portfolio center.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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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