Correlation Between Mangels Industrial and Teladoc Health

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

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

Diversification Opportunities for Mangels Industrial and Teladoc Health

0.26

Correlation Coefficient

Mangels Industrial  Teladoc Health

Modest diversification

The 3 months correlation between Mangels and Teladoc is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Mangels Industrial SA and Teladoc Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teladoc Health and Mangels Industrial 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 Mangels Industrial SA 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 Mangels Industrial i.e., Mangels Industrial and Teladoc Health go up and down completely randomly.

Pair Corralation between Mangels Industrial and Teladoc Health

Assuming the 90 days trading horizon Mangels Industrial SA is expected to under-perform the Teladoc Health. But the preferred stock apears to be less risky and, when comparing its historical volatility, Mangels Industrial SA is 2.15 times less risky than Teladoc Health. The preferred stock trades about 0.0 of its potential returns per unit of risk. The Teladoc Health is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  196.00  in Teladoc Health on December 25, 2024 and sell it today you would lose (26.00) from holding Teladoc Health or give up 13.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.33%
Values	Daily Returns

Mangels Industrial SA  vs.  Teladoc Health

Mangels Industrial

Risk-Adjusted Performance

Very Weak

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

Teladoc Health

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Teladoc Health are ranked lower than 1 (%) 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 Mangels Industrial and Teladoc Health

The main advantage of trading using opposite Mangels Industrial and Teladoc Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mangels Industrial 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 Mangels Industrial SA 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.

Check out your portfolio center.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.