Correlation Between Certara and Teladoc

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

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

Diversification Opportunities for Certara and Teladoc

0.79

Correlation Coefficient

Certara  Teladoc

Poor diversification

The 3 months correlation between Certara and Teladoc is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Certara and Teladoc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teladoc and Certara 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 Certara 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 Certara i.e., Certara and Teladoc go up and down completely randomly.

Pair Corralation between Certara and Teladoc

Given the investment horizon of 90 days Certara is expected to generate 0.67 times more return on investment than Teladoc. However, Certara is 1.48 times less risky than Teladoc. It trades about -0.02 of its potential returns per unit of risk. Teladoc is currently generating about -0.03 per unit of risk. If you would invest  1,054  in Certara on December 29, 2024 and sell it today you would lose (63.00) from holding Certara or give up 5.98% of portfolio value over 90 days.

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

Certara  vs.  Teladoc

Certara

Risk-Adjusted Performance

Very Weak

Over the last 90 days Certara has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Certara is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the 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 Certara and Teladoc

The main advantage of trading using opposite Certara and Teladoc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Certara 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 Certara 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 CEOs Directory module to screen CEOs from public companies around the world.