Correlation Between Tela Bio and Procept Biorobotics
Can any of the company-specific risk be diversified away by investing in both Tela Bio and Procept Biorobotics 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 Tela Bio and Procept Biorobotics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tela Bio and Procept Biorobotics Corp, you can compare the effects of market volatilities on Tela Bio and Procept Biorobotics 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 Tela Bio with a short position of Procept Biorobotics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tela Bio and Procept Biorobotics.
Diversification Opportunities for Tela Bio and Procept Biorobotics
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tela and Procept is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Tela Bio and Procept Biorobotics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Procept Biorobotics Corp and Tela Bio 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 Tela Bio are associated (or correlated) with Procept Biorobotics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Procept Biorobotics Corp has no effect on the direction of Tela Bio i.e., Tela Bio and Procept Biorobotics go up and down completely randomly.
Pair Corralation between Tela Bio and Procept Biorobotics
Given the investment horizon of 90 days Tela Bio is expected to under-perform the Procept Biorobotics. But the stock apears to be less risky and, when comparing its historical volatility, Tela Bio is 1.06 times less risky than Procept Biorobotics. The stock trades about -0.07 of its potential returns per unit of risk. The Procept Biorobotics Corp is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 3,392 in Procept Biorobotics Corp on August 31, 2024 and sell it today you would earn a total of 6,167 from holding Procept Biorobotics Corp or generate 181.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tela Bio vs. Procept Biorobotics Corp
Performance |
| Timeline |
| Tela Bio |
| Procept Biorobotics Corp |
Tela Bio and Procept Biorobotics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tela Bio and Procept Biorobotics
The main advantage of trading using opposite Tela Bio and Procept Biorobotics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tela Bio position performs unexpectedly, Procept Biorobotics 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 Procept Biorobotics will offset losses from the drop in Procept Biorobotics' long position.| Tela Bio vs. Sight Sciences | Tela Bio vs. Tactile Systems Technology | Tela Bio vs. Clearpoint Neuro | Tela Bio vs. CVRx Inc |
| Procept Biorobotics vs. Orthopediatrics Corp | Procept Biorobotics vs. Neuropace | Procept Biorobotics vs. Pulmonx Corp | Procept Biorobotics vs. SurModics |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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