Correlation Between Teladoc and Plumb Balanced

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

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

Diversification Opportunities for Teladoc and Plumb Balanced

-0.81

Correlation Coefficient

Teladoc  Plumb Balanced

Pay attention - limited upside

The 3 months correlation between Teladoc and Plumb is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Teladoc and Plumb Balanced Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plumb Balanced and Teladoc 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 Teladoc are associated (or correlated) with Plumb Balanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plumb Balanced has no effect on the direction of Teladoc i.e., Teladoc and Plumb Balanced go up and down completely randomly.

Pair Corralation between Teladoc and Plumb Balanced

Given the investment horizon of 90 days Teladoc is expected to under-perform the Plumb Balanced. In addition to that, Teladoc is 3.89 times more volatile than Plumb Balanced Fund. It trades about -0.37 of its total potential returns per unit of risk. Plumb Balanced Fund is currently generating about -0.33 per unit of volatility. If you would invest  3,793  in Plumb Balanced Fund on January 20, 2024 and sell it today you would lose (139.00) from holding Plumb Balanced Fund or give up 3.66% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Teladoc  vs.  Plumb Balanced Fund

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 conflicting performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Plumb Balanced

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Plumb Balanced Fund are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong fundamental drivers, Plumb Balanced is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Teladoc and Plumb Balanced

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

The idea behind Teladoc and Plumb Balanced Fund 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.

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 Bonds Directory module to find actively traded corporate debentures issued by US companies.