Correlation Between Heartbeam and Teladoc

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

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

Diversification Opportunities for Heartbeam and Teladoc

0.35

Correlation Coefficient

Heartbeam  Teladoc

Weak diversification

The 3 months correlation between Heartbeam and Teladoc is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Heartbeam and Teladoc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teladoc and Heartbeam 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 Heartbeam 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 Heartbeam i.e., Heartbeam and Teladoc go up and down completely randomly.

Pair Corralation between Heartbeam and Teladoc

Given the investment horizon of 90 days Heartbeam is expected to generate 0.73 times more return on investment than Teladoc. However, Heartbeam is 1.37 times less risky than Teladoc. It trades about -0.04 of its potential returns per unit of risk. Teladoc is currently generating about -0.03 per unit of risk. If you would invest  216.00  in Heartbeam on December 30, 2024 and sell it today you would lose (21.00) from holding Heartbeam or give up 9.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Heartbeam  vs.  Teladoc

Heartbeam

Risk-Adjusted Performance

Very Weak

Over the last 90 days Heartbeam has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Teladoc

Risk-Adjusted Performance

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 Heartbeam and Teladoc

The main advantage of trading using opposite Heartbeam and Teladoc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heartbeam 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 Heartbeam 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.