Correlation Between Teleflex Incorporated and Morgan Advanced

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

By analyzing existing cross correlation between Teleflex Incorporated and Morgan Advanced Materials, you can compare the effects of market volatilities on Teleflex Incorporated and Morgan Advanced 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 Morgan Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teleflex Incorporated and Morgan Advanced.

Diversification Opportunities for Teleflex Incorporated and Morgan Advanced

0.81

Correlation Coefficient

Teleflex Incorporated  Morgan Advanced

Very poor diversification

The 3 months correlation between Teleflex and Morgan is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Teleflex Incorporated and Morgan Advanced Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Morgan Advanced Materials 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 Morgan Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Morgan Advanced Materials has no effect on the direction of Teleflex Incorporated i.e., Teleflex Incorporated and Morgan Advanced go up and down completely randomly.

Pair Corralation between Teleflex Incorporated and Morgan Advanced

Considering the 90-day investment horizon Teleflex Incorporated is expected to under-perform the Morgan Advanced. But the stock apears to be less risky and, when comparing its historical volatility, Teleflex Incorporated is 1.15 times less risky than Morgan Advanced. The stock trades about -0.17 of its potential returns per unit of risk. The Morgan Advanced Materials is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest  378.00  in Morgan Advanced Materials on October 8, 2024 and sell it today you would lose (53.00) from holding Morgan Advanced Materials or give up 14.02% 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.  Morgan Advanced Materials

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.

Morgan Advanced Materials

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Morgan Advanced Materials has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent 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.

Pair Trading with Teleflex Incorporated and Morgan Advanced

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

The idea behind Teleflex Incorporated and Morgan Advanced Materials 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.