Correlation Between SAG Holdings and Teleflex Incorporated

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

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

Diversification Opportunities for SAG Holdings and Teleflex Incorporated

0.52

Correlation Coefficient

SAG Holdings  Teleflex Incorporated

Very weak diversification

The 3 months correlation between SAG and Teleflex is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding SAG Holdings Limited and Teleflex Incorporated in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teleflex Incorporated and SAG Holdings 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 SAG Holdings Limited 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 SAG Holdings i.e., SAG Holdings and Teleflex Incorporated go up and down completely randomly.

Pair Corralation between SAG Holdings and Teleflex Incorporated

Considering the 90-day investment horizon SAG Holdings Limited is expected to under-perform the Teleflex Incorporated. In addition to that, SAG Holdings is 3.64 times more volatile than Teleflex Incorporated. It trades about -0.2 of its total potential returns per unit of risk. Teleflex Incorporated is currently generating about -0.06 per unit of volatility. If you would invest  24,544  in Teleflex Incorporated on October 24, 2024 and sell it today you would lose (6,468) from holding Teleflex Incorporated or give up 26.35% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	24.7%
Values	Daily Returns

SAG Holdings Limited  vs.  Teleflex Incorporated

SAG Holdings Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SAG Holdings Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Teleflex Incorporated

Risk-Adjusted Performance

0 of 100

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

Pair Trading with SAG Holdings and Teleflex Incorporated

The main advantage of trading using opposite SAG Holdings and Teleflex Incorporated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAG Holdings 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 SAG Holdings Limited 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.