Correlation Between Progyny and Teladoc

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

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

Diversification Opportunities for Progyny and Teladoc

0.4

Correlation Coefficient

Progyny  Teladoc

Very weak diversification

The 3 months correlation between Progyny and Teladoc is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Progyny and Teladoc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teladoc and Progyny 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 Progyny 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 Progyny i.e., Progyny and Teladoc go up and down completely randomly.

Pair Corralation between Progyny and Teladoc

Given the investment horizon of 90 days Progyny is expected to generate 0.53 times more return on investment than Teladoc. However, Progyny is 1.88 times less risky than Teladoc. It trades about 0.19 of its potential returns per unit of risk. Teladoc is currently generating about -0.03 per unit of risk. If you would invest  1,693  in Progyny on December 29, 2024 and sell it today you would earn a total of  497.00  from holding Progyny or generate 29.36% return on investment over 90 days.

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

Progyny  vs.  Teladoc

Progyny

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Progyny are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Progyny showed solid returns over the last few months and may actually be approaching a breakup point.

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 Progyny and Teladoc

The main advantage of trading using opposite Progyny and Teladoc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Progyny 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 Progyny 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 Stocks Directory module to find actively traded stocks across global markets.