Correlation Between Tela Bio and TransMedics
Can any of the company-specific risk be diversified away by investing in both Tela Bio and TransMedics 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 TransMedics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tela Bio and TransMedics Group, you can compare the effects of market volatilities on Tela Bio and TransMedics 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 TransMedics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tela Bio and TransMedics.
Diversification Opportunities for Tela Bio and TransMedics
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tela and TransMedics is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Tela Bio and TransMedics Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TransMedics Group 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 TransMedics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TransMedics Group has no effect on the direction of Tela Bio i.e., Tela Bio and TransMedics go up and down completely randomly.
Pair Corralation between Tela Bio and TransMedics
Given the investment horizon of 90 days Tela Bio is expected to under-perform the TransMedics. But the stock apears to be less risky and, when comparing its historical volatility, Tela Bio is 1.28 times less risky than TransMedics. The stock trades about -0.05 of its potential returns per unit of risk. The TransMedics Group is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 6,030 in TransMedics Group on August 28, 2024 and sell it today you would earn a total of 1,828 from holding TransMedics Group or generate 30.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tela Bio vs. TransMedics Group
Performance |
| Timeline |
| Tela Bio |
| TransMedics Group |
Tela Bio and TransMedics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tela Bio and TransMedics
The main advantage of trading using opposite Tela Bio and TransMedics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tela Bio position performs unexpectedly, TransMedics 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 TransMedics will offset losses from the drop in TransMedics' long position.| Tela Bio vs. Sight Sciences | Tela Bio vs. Tactile Systems Technology | Tela Bio vs. Clearpoint Neuro | Tela Bio vs. CVRx Inc |
| TransMedics vs. Inspire Medical Systems | TransMedics vs. Inari Medical | TransMedics vs. InMode | TransMedics vs. Insulet |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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