Correlation Between Treace Medical and Tela Bio
Can any of the company-specific risk be diversified away by investing in both Treace Medical and Tela Bio 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 Treace Medical and Tela Bio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Treace Medical Concepts and Tela Bio, you can compare the effects of market volatilities on Treace Medical and Tela Bio 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 Treace Medical with a short position of Tela Bio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Treace Medical and Tela Bio.
Diversification Opportunities for Treace Medical and Tela Bio
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Treace and Tela is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Treace Medical Concepts and Tela Bio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tela Bio and Treace Medical 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 Treace Medical Concepts are associated (or correlated) with Tela Bio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tela Bio has no effect on the direction of Treace Medical i.e., Treace Medical and Tela Bio go up and down completely randomly.
Pair Corralation between Treace Medical and Tela Bio
Given the investment horizon of 90 days Treace Medical Concepts is expected to generate 1.6 times more return on investment than Tela Bio. However, Treace Medical is 1.6 times more volatile than Tela Bio. It trades about -0.01 of its potential returns per unit of risk. Tela Bio is currently generating about -0.07 per unit of risk. If you would invest 2,591 in Treace Medical Concepts on August 31, 2024 and sell it today you would lose (1,739) from holding Treace Medical Concepts or give up 67.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Treace Medical Concepts vs. Tela Bio
Performance |
| Timeline |
| Treace Medical Concepts |
| Tela Bio |
Treace Medical and Tela Bio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Treace Medical and Tela Bio
The main advantage of trading using opposite Treace Medical and Tela Bio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Treace Medical position performs unexpectedly, Tela Bio 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 Tela Bio will offset losses from the drop in Tela Bio's long position.| Treace Medical vs. Rxsight | Treace Medical vs. Axogen Inc | Treace Medical vs. Pulmonx Corp | Treace Medical vs. Orthofix Medical |
| Tela Bio vs. Sight Sciences | Tela Bio vs. Tactile Systems Technology | Tela Bio vs. Clearpoint Neuro | Tela Bio vs. CVRx Inc |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |