Correlation Between Teleflex Incorporated and Varian Medical

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

By analyzing existing cross correlation between Teleflex Incorporated and Varian Medical Systems, you can compare the effects of market volatilities on Teleflex Incorporated and Varian Medical 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 Varian Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teleflex Incorporated and Varian Medical.

Diversification Opportunities for Teleflex Incorporated and Varian Medical

0.0

Correlation Coefficient

Teleflex Incorporated  Varian Medical

Pay attention - limited upside

The 3 months correlation between Teleflex and Varian is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Teleflex Incorporated and Varian Medical Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Varian Medical Systems 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 Varian Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Varian Medical Systems has no effect on the direction of Teleflex Incorporated i.e., Teleflex Incorporated and Varian Medical go up and down completely randomly.

Pair Corralation between Teleflex Incorporated and Varian Medical

If you would invest (100.00) in Varian Medical Systems on January 25, 2024 and sell it today you would earn a total of  100.00  from holding Varian Medical Systems or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Teleflex Incorporated  vs.  Varian Medical Systems

Teleflex Incorporated

Risk-Adjusted Performance

0 of 100

Very Weak

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 May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Varian Medical Systems

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Varian Medical Systems has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Varian Medical is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Teleflex Incorporated and Varian Medical

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

The idea behind Teleflex Incorporated and Varian Medical Systems 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.