Correlation Between Teleflex Incorporated and Modine Manufacturing
Can any of the company-specific risk be diversified away by investing in both Teleflex Incorporated and Modine Manufacturing 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 Modine Manufacturing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teleflex Incorporated and Modine Manufacturing, you can compare the effects of market volatilities on Teleflex Incorporated and Modine Manufacturing 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 Modine Manufacturing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teleflex Incorporated and Modine Manufacturing.
Diversification Opportunities for Teleflex Incorporated and Modine Manufacturing
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Teleflex and Modine is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Teleflex Incorporated and Modine Manufacturing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Modine Manufacturing 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 Modine Manufacturing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Modine Manufacturing has no effect on the direction of Teleflex Incorporated i.e., Teleflex Incorporated and Modine Manufacturing go up and down completely randomly.
Pair Corralation between Teleflex Incorporated and Modine Manufacturing
Considering the 90-day investment horizon Teleflex Incorporated is expected to under-perform the Modine Manufacturing. But the stock apears to be less risky and, when comparing its historical volatility, Teleflex Incorporated is 2.04 times less risky than Modine Manufacturing. The stock trades about -0.07 of its potential returns per unit of risk. The Modine Manufacturing is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 6,045 in Modine Manufacturing on September 20, 2024 and sell it today you would earn a total of 6,722 from holding Modine Manufacturing or generate 111.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teleflex Incorporated vs. Modine Manufacturing
Performance |
| Timeline |
| Teleflex Incorporated |
| Modine Manufacturing |
Teleflex Incorporated and Modine Manufacturing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teleflex Incorporated and Modine Manufacturing
The main advantage of trading using opposite Teleflex Incorporated and Modine Manufacturing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teleflex Incorporated position performs unexpectedly, Modine Manufacturing 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 Modine Manufacturing will offset losses from the drop in Modine Manufacturing's long position.| Teleflex Incorporated vs. Avita Medical | Teleflex Incorporated vs. Inogen Inc | Teleflex Incorporated vs. Apyx Medical |
| Modine Manufacturing vs. Ford Motor | Modine Manufacturing vs. General Motors | Modine Manufacturing vs. Goodyear Tire Rubber | Modine Manufacturing vs. Li Auto |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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