Correlation Between Teleflex Incorporated and Lifezone Metals

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

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

Diversification Opportunities for Teleflex Incorporated and Lifezone Metals

0.87

Correlation Coefficient

Teleflex Incorporated  Lifezone Metals

Very poor diversification

The 3 months correlation between Teleflex and Lifezone is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Teleflex Incorporated and Lifezone Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifezone Metals and Teleflex Incorporated 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 Teleflex Incorporated are associated (or correlated) with Lifezone Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifezone Metals has no effect on the direction of Teleflex Incorporated i.e., Teleflex Incorporated and Lifezone Metals go up and down completely randomly.

Pair Corralation between Teleflex Incorporated and Lifezone Metals

Considering the 90-day investment horizon Teleflex Incorporated is expected to generate 1.24 times more return on investment than Lifezone Metals. However, Teleflex Incorporated is 1.24 times more volatile than Lifezone Metals Limited. It trades about -0.11 of its potential returns per unit of risk. Lifezone Metals Limited is currently generating about -0.27 per unit of risk. If you would invest  17,661  in Teleflex Incorporated on December 29, 2024 and sell it today you would lose (3,724) from holding Teleflex Incorporated or give up 21.09% of portfolio value over 90 days.

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

Teleflex Incorporated  vs.  Lifezone Metals Limited

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 weak 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.

Lifezone Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lifezone Metals Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Teleflex Incorporated and Lifezone Metals

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

The idea behind Teleflex Incorporated and Lifezone Metals Limited 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.