Correlation Between Silk Road and Tela Bio
Can any of the company-specific risk be diversified away by investing in both Silk Road and Tela Bio 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 Silk Road and Tela Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silk Road Medical and Tela Bio, you can compare the effects of market volatilities on Silk Road and Tela Bio 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 Silk Road with a short position of Tela Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silk Road and Tela Bio.
Diversification Opportunities for Silk Road and Tela Bio
Weak diversification
The 3 months correlation between Silk and Tela is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Silk Road Medical and Tela Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tela Bio and Silk Road 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 Silk Road Medical are associated (or correlated) with Tela Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tela Bio has no effect on the direction of Silk Road i.e., Silk Road and Tela Bio go up and down completely randomly.
Pair Corralation between Silk Road and Tela Bio
If you would invest 284.00 in Tela Bio on August 31, 2024 and sell it today you would earn a total of 19.00 from holding Tela Bio or generate 6.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Silk Road Medical vs. Tela Bio
Performance |
| Timeline |
| Silk Road Medical |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
| Tela Bio |
Silk Road and Tela Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silk Road and Tela Bio
The main advantage of trading using opposite Silk Road and Tela Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silk Road position performs unexpectedly, Tela Bio 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 Tela Bio will offset losses from the drop in Tela Bio's long position.| Silk Road vs. LivaNova PLC | Silk Road vs. Orthopediatrics Corp | Silk Road vs. Pulmonx Corp | Silk Road vs. Si Bone |
| Tela Bio vs. Sight Sciences | Tela Bio vs. Tactile Systems Technology | Tela Bio vs. Clearpoint Neuro | Tela Bio vs. CVRx Inc |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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