Correlation Between Rocky Brands and Teleflex Incorporated
Can any of the company-specific risk be diversified away by investing in both Rocky Brands 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 Rocky Brands and Teleflex Incorporated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rocky Brands and Teleflex Incorporated, you can compare the effects of market volatilities on Rocky Brands 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 Rocky Brands with a short position of Teleflex Incorporated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rocky Brands and Teleflex Incorporated.
Diversification Opportunities for Rocky Brands and Teleflex Incorporated
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Rocky and Teleflex is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Rocky Brands and Teleflex Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teleflex Incorporated and Rocky Brands 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 Rocky Brands 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 Rocky Brands i.e., Rocky Brands and Teleflex Incorporated go up and down completely randomly.
Pair Corralation between Rocky Brands and Teleflex Incorporated
Given the investment horizon of 90 days Rocky Brands is expected to generate 1.64 times more return on investment than Teleflex Incorporated. However, Rocky Brands is 1.64 times more volatile than Teleflex Incorporated. It trades about 0.15 of its potential returns per unit of risk. Teleflex Incorporated is currently generating about -0.11 per unit of risk. If you would invest 2,255 in Rocky Brands on November 8, 2024 and sell it today you would earn a total of 157.00 from holding Rocky Brands or generate 6.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rocky Brands vs. Teleflex Incorporated
Performance |
| Timeline |
| Rocky Brands |
| Teleflex Incorporated |
Rocky Brands and Teleflex Incorporated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rocky Brands and Teleflex Incorporated
The main advantage of trading using opposite Rocky Brands and Teleflex Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rocky Brands 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.| Rocky Brands vs. Vera Bradley | Rocky Brands vs. Steven Madden | Rocky Brands vs. Wolverine World Wide | Rocky Brands vs. Caleres |
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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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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