Correlation Between Streamline Health and Teladoc

Can any of the company-specific risk be diversified away by investing in both Streamline Health and Teladoc 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 Streamline Health and Teladoc into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Streamline Health Solutions and Teladoc, you can compare the effects of market volatilities on Streamline Health and Teladoc 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 Streamline Health with a short position of Teladoc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Streamline Health and Teladoc.

Diversification Opportunities for Streamline Health and Teladoc

-0.08

Correlation Coefficient

Streamline Health  Teladoc

Good diversification

The 3 months correlation between Streamline and Teladoc is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Streamline Health Solutions and Teladoc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teladoc and Streamline Health 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 Streamline Health Solutions are associated (or correlated) with Teladoc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teladoc has no effect on the direction of Streamline Health i.e., Streamline Health and Teladoc go up and down completely randomly.

Pair Corralation between Streamline Health and Teladoc

Given the investment horizon of 90 days Streamline Health Solutions is expected to under-perform the Teladoc. In addition to that, Streamline Health is 2.52 times more volatile than Teladoc. It trades about -0.13 of its total potential returns per unit of risk. Teladoc is currently generating about -0.05 per unit of volatility. If you would invest  1,036  in Teladoc on June 24, 2024 and sell it today you would lose (161.00) from holding Teladoc or give up 15.54% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Streamline Health Solutions  vs.  Teladoc

Streamline Health

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Streamline Health Solutions has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in October 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Teladoc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Teladoc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Streamline Health and Teladoc

The main advantage of trading using opposite Streamline Health and Teladoc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Streamline Health position performs unexpectedly, Teladoc 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 Teladoc will offset losses from the drop in Teladoc's long position.

The idea behind Streamline Health Solutions and Teladoc 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.