Correlation Between Teladoc and NewCardio

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

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

Diversification Opportunities for Teladoc and NewCardio

0.0

Correlation Coefficient

Teladoc  NewCardio

Pay attention - limited upside

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

Pair Corralation between Teladoc and NewCardio

If you would invest  767.00  in Teladoc on September 5, 2024 and sell it today you would earn a total of  328.00  from holding Teladoc or generate 42.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.88%
Values	Daily Returns

Teladoc  vs.  NewCardio

Teladoc

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Teladoc are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of rather abnormal basic indicators, Teladoc exhibited solid returns over the last few months and may actually be approaching a breakup point.

NewCardio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NewCardio has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, NewCardio is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Teladoc and NewCardio

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

The idea behind Teladoc and NewCardio 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.