Correlation Between Teladoc Health and Bath Body
Can any of the company-specific risk be diversified away by investing in both Teladoc Health and Bath Body 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 Teladoc Health and Bath Body into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teladoc Health and Bath Body Works, you can compare the effects of market volatilities on Teladoc Health and Bath Body 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 Teladoc Health with a short position of Bath Body. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teladoc Health and Bath Body.
Diversification Opportunities for Teladoc Health and Bath Body
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Teladoc and Bath is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Teladoc Health and Bath Body Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bath Body Works and Teladoc Health 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 Teladoc Health are associated (or correlated) with Bath Body. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bath Body Works has no effect on the direction of Teladoc Health i.e., Teladoc Health and Bath Body go up and down completely randomly.
Pair Corralation between Teladoc Health and Bath Body
Assuming the 90 days trading horizon Teladoc Health is expected to under-perform the Bath Body. In addition to that, Teladoc Health is 1.23 times more volatile than Bath Body Works. It trades about -0.01 of its total potential returns per unit of risk. Bath Body Works is currently generating about 0.02 per unit of volatility. If you would invest 5,802 in Bath Body Works on September 12, 2024 and sell it today you would earn a total of 97.00 from holding Bath Body Works or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 42.94% |
| Values | Daily Returns |
Teladoc Health vs. Bath Body Works
Performance |
| Timeline |
| Teladoc Health |
| Bath Body Works |
Teladoc Health and Bath Body Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teladoc Health and Bath Body
The main advantage of trading using opposite Teladoc Health and Bath Body positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teladoc Health position performs unexpectedly, Bath Body 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 Bath Body will offset losses from the drop in Bath Body's long position.| Teladoc Health vs. Fundo Investimento Imobiliario | Teladoc Health vs. LESTE FDO INV | Teladoc Health vs. Fras le SA | Teladoc Health vs. Western Digital |
| Bath Body vs. Teladoc Health | Bath Body vs. United Rentals | Bath Body vs. Charter Communications | Bath Body vs. GP Investments |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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