Correlation Between Global X and Teladoc Health

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

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

Diversification Opportunities for Global X and Teladoc Health

0.76

Correlation Coefficient

Global X  Teladoc Health

Poor diversification

The 3 months correlation between Global and Teladoc is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Global X Funds and Teladoc Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teladoc Health and Global X 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 Global X Funds are associated (or correlated) with Teladoc Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teladoc Health has no effect on the direction of Global X i.e., Global X and Teladoc Health go up and down completely randomly.

Pair Corralation between Global X and Teladoc Health

Assuming the 90 days trading horizon Global X Funds is expected to generate 0.56 times more return on investment than Teladoc Health. However, Global X Funds is 1.79 times less risky than Teladoc Health. It trades about -0.1 of its potential returns per unit of risk. Teladoc Health is currently generating about -0.1 per unit of risk. If you would invest  5,090  in Global X Funds on October 12, 2024 and sell it today you would lose (205.00) from holding Global X Funds or give up 4.03% of portfolio value over 90 days.

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

Global X Funds  vs.  Teladoc Health

Global X Funds

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Global X Funds are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Global X may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Teladoc Health

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Teladoc Health are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Teladoc Health sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global X and Teladoc Health

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

The idea behind Global X Funds and Teladoc Health 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.