Correlation Between Abbott Laboratories and Teladoc Health
Can any of the company-specific risk be diversified away by investing in both Abbott Laboratories and Teladoc Health 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 Abbott Laboratories and Teladoc Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Abbott Laboratories and Teladoc Health, you can compare the effects of market volatilities on Abbott Laboratories and Teladoc Health 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 Abbott Laboratories with a short position of Teladoc Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Abbott Laboratories and Teladoc Health.
Diversification Opportunities for Abbott Laboratories and Teladoc Health
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Abbott and Teladoc is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Abbott Laboratories and Teladoc Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teladoc Health and Abbott Laboratories 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 Abbott Laboratories are associated (or correlated) with Teladoc Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teladoc Health has no effect on the direction of Abbott Laboratories i.e., Abbott Laboratories and Teladoc Health go up and down completely randomly.
Pair Corralation between Abbott Laboratories and Teladoc Health
Assuming the 90 days trading horizon Abbott Laboratories is expected to generate 4.07 times less return on investment than Teladoc Health. But when comparing it to its historical volatility, Abbott Laboratories is 5.61 times less risky than Teladoc Health. It trades about 0.17 of its potential returns per unit of risk. Teladoc Health is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 190.00 in Teladoc Health on September 12, 2024 and sell it today you would earn a total of 22.00 from holding Teladoc Health or generate 11.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Abbott Laboratories vs. Teladoc Health
Performance |
| Timeline |
| Abbott Laboratories |
| Teladoc Health |
Abbott Laboratories and Teladoc Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Abbott Laboratories and Teladoc Health
The main advantage of trading using opposite Abbott Laboratories and Teladoc Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Abbott Laboratories position performs unexpectedly, Teladoc Health 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 Teladoc Health will offset losses from the drop in Teladoc Health's long position.| Abbott Laboratories vs. Teladoc Health | Abbott Laboratories vs. Lloyds Banking Group | Abbott Laboratories vs. Mitsubishi UFJ Financial | Abbott Laboratories vs. CVS Health |
| Teladoc Health vs. Fundo Investimento Imobiliario | Teladoc Health vs. LESTE FDO INV | Teladoc Health vs. Fras le SA | Teladoc Health vs. Western Digital |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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