Correlation Between BioLife Solutions and Teleflex Incorporated
Can any of the company-specific risk be diversified away by investing in both BioLife Solutions 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 BioLife Solutions and Teleflex Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BioLife Solutions and Teleflex Incorporated, you can compare the effects of market volatilities on BioLife Solutions 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 BioLife Solutions with a short position of Teleflex Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of BioLife Solutions and Teleflex Incorporated.
Diversification Opportunities for BioLife Solutions and Teleflex Incorporated
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between BioLife and Teleflex is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding BioLife Solutions and Teleflex Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teleflex Incorporated and BioLife Solutions 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 BioLife Solutions 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 BioLife Solutions i.e., BioLife Solutions and Teleflex Incorporated go up and down completely randomly.
Pair Corralation between BioLife Solutions and Teleflex Incorporated
Given the investment horizon of 90 days BioLife Solutions is expected to generate 1.52 times more return on investment than Teleflex Incorporated. However, BioLife Solutions is 1.52 times more volatile than Teleflex Incorporated. It trades about 0.08 of its potential returns per unit of risk. Teleflex Incorporated is currently generating about -0.17 per unit of risk. If you would invest 2,301 in BioLife Solutions on October 20, 2024 and sell it today you would earn a total of 313.00 from holding BioLife Solutions or generate 13.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BioLife Solutions vs. Teleflex Incorporated
Performance |
| Timeline |
| BioLife Solutions |
| Teleflex Incorporated |
BioLife Solutions and Teleflex Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BioLife Solutions and Teleflex Incorporated
The main advantage of trading using opposite BioLife Solutions and Teleflex Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BioLife Solutions 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.| BioLife Solutions vs. Akoya Biosciences | BioLife Solutions vs. AtriCure | BioLife Solutions vs. ICU Medical | BioLife Solutions vs. Haemonetics |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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