Correlation Between Jefferies Financial and Teladoc Health
Can any of the company-specific risk be diversified away by investing in both Jefferies Financial 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 Jefferies Financial and Teladoc Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jefferies Financial Group and Teladoc Health, you can compare the effects of market volatilities on Jefferies Financial 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 Jefferies Financial with a short position of Teladoc Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jefferies Financial and Teladoc Health.
Diversification Opportunities for Jefferies Financial and Teladoc Health
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jefferies and Teladoc is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Jefferies Financial Group and Teladoc Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teladoc Health and Jefferies Financial 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 Jefferies Financial Group 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 Jefferies Financial i.e., Jefferies Financial and Teladoc Health go up and down completely randomly.
Pair Corralation between Jefferies Financial and Teladoc Health
Assuming the 90 days trading horizon Jefferies Financial Group is expected to generate 0.79 times more return on investment than Teladoc Health. However, Jefferies Financial Group is 1.27 times less risky than Teladoc Health. It trades about -0.26 of its potential returns per unit of risk. Teladoc Health is currently generating about -0.23 per unit of risk. If you would invest 49,770 in Jefferies Financial Group on October 17, 2024 and sell it today you would lose (6,254) from holding Jefferies Financial Group or give up 12.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jefferies Financial Group vs. Teladoc Health
Performance |
| Timeline |
| Jefferies Financial |
| Teladoc Health |
Jefferies Financial and Teladoc Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jefferies Financial and Teladoc Health
The main advantage of trading using opposite Jefferies Financial and Teladoc Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jefferies Financial 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.| Jefferies Financial vs. Iron Mountain Incorporated | Jefferies Financial vs. Verizon Communications | Jefferies Financial vs. United States Steel | Jefferies Financial vs. Marvell Technology |
| Teladoc Health vs. Discover Financial Services | Teladoc Health vs. Liberty Broadband | Teladoc Health vs. Citizens Financial Group, | Teladoc Health vs. Jefferies Financial Group |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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