Correlation Between Teleflex Incorporated and NISOURCE

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

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

Diversification Opportunities for Teleflex Incorporated and NISOURCE

0.73

Correlation Coefficient

Teleflex Incorporated  NISOURCE

Poor diversification

The 3 months correlation between Teleflex and NISOURCE is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Teleflex Incorporated and NISOURCE FIN P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NISOURCE FIN P 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 NISOURCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NISOURCE FIN P has no effect on the direction of Teleflex Incorporated i.e., Teleflex Incorporated and NISOURCE go up and down completely randomly.

Pair Corralation between Teleflex Incorporated and NISOURCE

Considering the 90-day investment horizon Teleflex Incorporated is expected to under-perform the NISOURCE. In addition to that, Teleflex Incorporated is 1.37 times more volatile than NISOURCE FIN P. It trades about -0.16 of its total potential returns per unit of risk. NISOURCE FIN P is currently generating about -0.07 per unit of volatility. If you would invest  9,825  in NISOURCE FIN P on October 7, 2024 and sell it today you would lose (559.00) from holding NISOURCE FIN P or give up 5.69% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	68.25%
Values	Daily Returns

Teleflex Incorporated  vs.  NISOURCE FIN P

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.

NISOURCE FIN P

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NISOURCE FIN P has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest inconsistent performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for NISOURCE FIN P investors.

Pair Trading with Teleflex Incorporated and NISOURCE

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

The idea behind Teleflex Incorporated and NISOURCE FIN P 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.