Correlation Between Franchise and Teleflex Incorporated

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

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

Diversification Opportunities for Franchise and Teleflex Incorporated

0.0

Correlation Coefficient

Franchise  Teleflex Incorporated

Pay attention - limited upside

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

Pair Corralation between Franchise and Teleflex Incorporated

If you would invest (100.00) in Franchise Group on December 22, 2024 and sell it today you would earn a total of  100.00  from holding Franchise Group 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

Franchise Group  vs.  Teleflex Incorporated

Franchise Group

Risk-Adjusted Performance

Very Weak

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

Teleflex Incorporated

Risk-Adjusted Performance

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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Franchise and Teleflex Incorporated

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

The idea behind Franchise Group and Teleflex Incorporated 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.