Correlation Between Teleflex Incorporated and Alta Equipment
Can any of the company-specific risk be diversified away by investing in both Teleflex Incorporated and Alta Equipment 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 Teleflex Incorporated and Alta Equipment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teleflex Incorporated and Alta Equipment Group, you can compare the effects of market volatilities on Teleflex Incorporated and Alta Equipment 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 Teleflex Incorporated with a short position of Alta Equipment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teleflex Incorporated and Alta Equipment.
Diversification Opportunities for Teleflex Incorporated and Alta Equipment
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Teleflex and Alta is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Teleflex Incorporated and Alta Equipment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alta Equipment Group and Teleflex Incorporated 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 Teleflex Incorporated are associated (or correlated) with Alta Equipment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alta Equipment Group has no effect on the direction of Teleflex Incorporated i.e., Teleflex Incorporated and Alta Equipment go up and down completely randomly.
Pair Corralation between Teleflex Incorporated and Alta Equipment
Considering the 90-day investment horizon Teleflex Incorporated is expected to generate 4.93 times less return on investment than Alta Equipment. But when comparing it to its historical volatility, Teleflex Incorporated is 2.42 times less risky than Alta Equipment. It trades about 0.08 of its potential returns per unit of risk. Alta Equipment Group is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 672.00 in Alta Equipment Group on October 22, 2024 and sell it today you would earn a total of 57.00 from holding Alta Equipment Group or generate 8.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teleflex Incorporated vs. Alta Equipment Group
Performance |
| Timeline |
| Teleflex Incorporated |
| Alta Equipment Group |
Teleflex Incorporated and Alta Equipment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teleflex Incorporated and Alta Equipment
The main advantage of trading using opposite Teleflex Incorporated and Alta Equipment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teleflex Incorporated position performs unexpectedly, Alta Equipment 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 Alta Equipment will offset losses from the drop in Alta Equipment's long position.| Teleflex Incorporated vs. West Pharmaceutical Services | Teleflex Incorporated vs. Alcon AG | Teleflex Incorporated vs. ResMed Inc | Teleflex Incorporated vs. ICU Medical |
| Alta Equipment vs. PROG Holdings | Alta Equipment vs. GATX Corporation | Alta Equipment vs. McGrath RentCorp | Alta Equipment vs. Custom Truck One |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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