Correlation Between EXACT Sciences and Teleflex Incorporated
Can any of the company-specific risk be diversified away by investing in both EXACT Sciences 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 EXACT Sciences and Teleflex Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EXACT Sciences and Teleflex Incorporated, you can compare the effects of market volatilities on EXACT Sciences 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 EXACT Sciences with a short position of Teleflex Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of EXACT Sciences and Teleflex Incorporated.
Diversification Opportunities for EXACT Sciences and Teleflex Incorporated
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EXACT and Teleflex is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding EXACT Sciences and Teleflex Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teleflex Incorporated and EXACT Sciences 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 EXACT Sciences 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 EXACT Sciences i.e., EXACT Sciences and Teleflex Incorporated go up and down completely randomly.
Pair Corralation between EXACT Sciences and Teleflex Incorporated
Given the investment horizon of 90 days EXACT Sciences is expected to generate 1.74 times more return on investment than Teleflex Incorporated. However, EXACT Sciences is 1.74 times more volatile than Teleflex Incorporated. It trades about -0.07 of its potential returns per unit of risk. Teleflex Incorporated is currently generating about -0.24 per unit of risk. If you would invest 6,964 in EXACT Sciences on August 30, 2024 and sell it today you would lose (954.00) from holding EXACT Sciences or give up 13.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EXACT Sciences vs. Teleflex Incorporated
Performance |
| Timeline |
| EXACT Sciences |
| Teleflex Incorporated |
EXACT Sciences and Teleflex Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EXACT Sciences and Teleflex Incorporated
The main advantage of trading using opposite EXACT Sciences and Teleflex Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EXACT Sciences 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.| EXACT Sciences vs. Natera Inc | EXACT Sciences vs. Caredx Inc | EXACT Sciences vs. Illumina | EXACT Sciences vs. Twist Bioscience Corp |
| 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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