Correlation Between Teleflex Incorporated and ALIBABA

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Can any of the company-specific risk be diversified away by investing in both Teleflex Incorporated and ALIBABA 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 ALIBABA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teleflex Incorporated and ALIBABA GROUP HLDG, you can compare the effects of market volatilities on Teleflex Incorporated and ALIBABA 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 ALIBABA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teleflex Incorporated and ALIBABA.

Diversification Opportunities for Teleflex Incorporated and ALIBABA

0.67
  Correlation Coefficient

Poor diversification

The 3 months correlation between Teleflex and ALIBABA is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Teleflex Incorporated and ALIBABA GROUP HLDG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALIBABA GROUP HLDG 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 ALIBABA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALIBABA GROUP HLDG has no effect on the direction of Teleflex Incorporated i.e., Teleflex Incorporated and ALIBABA go up and down completely randomly.

Pair Corralation between Teleflex Incorporated and ALIBABA

Considering the 90-day investment horizon Teleflex Incorporated is expected to under-perform the ALIBABA. In addition to that, Teleflex Incorporated is 2.83 times more volatile than ALIBABA GROUP HLDG. It trades about -0.25 of its total potential returns per unit of risk. ALIBABA GROUP HLDG is currently generating about -0.01 per unit of volatility. If you would invest  9,666  in ALIBABA GROUP HLDG on August 25, 2024 and sell it today you would lose (42.00) from holding ALIBABA GROUP HLDG or give up 0.43% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy81.82%
ValuesDaily Returns

Teleflex Incorporated  vs.  ALIBABA GROUP HLDG

 Performance 
       Timeline  
Teleflex Incorporated 

Risk-Adjusted Performance

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Over the last 90 days Teleflex Incorporated has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in December 2024. The current disturbance may also be a sign of long term up-swing for the company investors.
ALIBABA GROUP HLDG 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days ALIBABA GROUP HLDG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ALIBABA is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Teleflex Incorporated and ALIBABA Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Teleflex Incorporated and ALIBABA

The main advantage of trading using opposite Teleflex Incorporated and ALIBABA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teleflex Incorporated position performs unexpectedly, ALIBABA 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 ALIBABA will offset losses from the drop in ALIBABA's long position.
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The idea behind Teleflex Incorporated and ALIBABA GROUP HLDG pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.

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