Correlation Between Teladoc Health and Procter Gamble
Can any of the company-specific risk be diversified away by investing in both Teladoc Health and Procter Gamble 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 Procter Gamble into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teladoc Health and The Procter Gamble, you can compare the effects of market volatilities on Teladoc Health and Procter Gamble 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 Procter Gamble. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teladoc Health and Procter Gamble.
Diversification Opportunities for Teladoc Health and Procter Gamble
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Teladoc and Procter is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Teladoc Health and The Procter Gamble in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procter Gamble 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 Procter Gamble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procter Gamble has no effect on the direction of Teladoc Health i.e., Teladoc Health and Procter Gamble go up and down completely randomly.
Pair Corralation between Teladoc Health and Procter Gamble
Assuming the 90 days trading horizon Teladoc Health is expected to generate 4.56 times more return on investment than Procter Gamble. However, Teladoc Health is 4.56 times more volatile than The Procter Gamble. It trades about 0.33 of its potential returns per unit of risk. The Procter Gamble is currently generating about 0.29 per unit of risk. If you would invest 173.00 in Teladoc Health on August 27, 2024 and sell it today you would earn a total of 65.00 from holding Teladoc Health or generate 37.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teladoc Health vs. The Procter Gamble
Performance |
| Timeline |
| Teladoc Health |
| Procter Gamble |
Teladoc Health and Procter Gamble Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teladoc Health and Procter Gamble
The main advantage of trading using opposite Teladoc Health and Procter Gamble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teladoc Health position performs unexpectedly, Procter Gamble 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 Procter Gamble will offset losses from the drop in Procter Gamble's long position.| Teladoc Health vs. Fras le SA | Teladoc Health vs. Western Digital | Teladoc Health vs. Clave Indices De | Teladoc Health vs. BTG Pactual Logstica |
| Procter Gamble vs. Verizon Communications | Procter Gamble vs. Micron Technology | Procter Gamble vs. Southwest Airlines Co | Procter Gamble vs. Align Technology |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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