Correlation Between Teleflex Incorporated and Sanara Medtech

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

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

Diversification Opportunities for Teleflex Incorporated and Sanara Medtech

0.5

Correlation Coefficient

Teleflex Incorporated  Sanara Medtech

Very weak diversification

The 3 months correlation between Teleflex and Sanara is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Teleflex Incorporated and Sanara Medtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanara Medtech 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 Sanara Medtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanara Medtech has no effect on the direction of Teleflex Incorporated i.e., Teleflex Incorporated and Sanara Medtech go up and down completely randomly.

Pair Corralation between Teleflex Incorporated and Sanara Medtech

Considering the 90-day investment horizon Teleflex Incorporated is expected to under-perform the Sanara Medtech. But the stock apears to be less risky and, when comparing its historical volatility, Teleflex Incorporated is 1.07 times less risky than Sanara Medtech. The stock trades about -0.11 of its potential returns per unit of risk. The Sanara Medtech is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  3,319  in Sanara Medtech on December 28, 2024 and sell it today you would lose (197.00) from holding Sanara Medtech or give up 5.94% of portfolio value over 90 days.

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

Teleflex Incorporated  vs.  Sanara Medtech

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.

Sanara Medtech

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Teleflex Incorporated and Sanara Medtech

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

The idea behind Teleflex Incorporated and Sanara Medtech 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.