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

0.05

Correlation Coefficient

Heartbeam  Teladoc

Significant diversification

The 3 months correlation between Heartbeam and Teladoc is 0.05. 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 under-perform the Teladoc. But the stock apears to be less risky and, when comparing its historical volatility, Heartbeam is 1.1 times less risky than Teladoc. The stock trades about -0.17 of its potential returns per unit of risk. The Teladoc is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  1,198  in Teladoc on November 29, 2024 and sell it today you would lose (99.00) from holding Teladoc or give up 8.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
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 unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing 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 rather sound basic indicators, Teladoc is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.