Correlation Between East Africa and Teleflex Incorporated
Can any of the company-specific risk be diversified away by investing in both East Africa 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 East Africa and Teleflex Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between East Africa Metals and Teleflex Incorporated, you can compare the effects of market volatilities on East Africa 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 East Africa with a short position of Teleflex Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Africa and Teleflex Incorporated.
Diversification Opportunities for East Africa and Teleflex Incorporated
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between East and Teleflex is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding East Africa Metals and Teleflex Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teleflex Incorporated and East Africa 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 East Africa Metals 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 East Africa i.e., East Africa and Teleflex Incorporated go up and down completely randomly.
Pair Corralation between East Africa and Teleflex Incorporated
If you would invest 11.00 in East Africa Metals on September 4, 2024 and sell it today you would earn a total of 0.00 from holding East Africa Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
East Africa Metals vs. Teleflex Incorporated
Performance |
| Timeline |
| East Africa Metals |
| Teleflex Incorporated |
East Africa and Teleflex Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East Africa and Teleflex Incorporated
The main advantage of trading using opposite East Africa and Teleflex Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East Africa 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.| East Africa vs. Pasinex Resources Limited | East Africa vs. Commander Resources | East Africa vs. Forsys Metals Corp | East Africa vs. American CuMo Mining |
| Teleflex Incorporated vs. Baxter International | Teleflex Incorporated vs. West Pharmaceutical Services | Teleflex Incorporated vs. ResMed Inc | Teleflex Incorporated vs. The Cooper Companies, |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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