Correlation Between HITACHI STRMACHADR2 and Teladoc

Can any of the company-specific risk be diversified away by investing in both HITACHI STRMACHADR2 and Teladoc 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 HITACHI STRMACHADR2 and Teladoc into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between HITACHI STRMACHADR2 and Teladoc, you can compare the effects of market volatilities on HITACHI STRMACHADR2 and Teladoc 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 HITACHI STRMACHADR2 with a short position of Teladoc. Check out your portfolio center. Please also check ongoing floating volatility patterns of HITACHI STRMACHADR2 and Teladoc.

Diversification Opportunities for HITACHI STRMACHADR2 and Teladoc

-0.44

Correlation Coefficient

HITACHI STRMACHADR2  Teladoc

Very good diversification

The 3 months correlation between HITACHI and Teladoc is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding HITACHI STRMACHADR2 and Teladoc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teladoc and HITACHI STRMACHADR2 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 HITACHI STRMACHADR2 are associated (or correlated) with Teladoc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teladoc has no effect on the direction of HITACHI STRMACHADR2 i.e., HITACHI STRMACHADR2 and Teladoc go up and down completely randomly.

Pair Corralation between HITACHI STRMACHADR2 and Teladoc

Assuming the 90 days trading horizon HITACHI STRMACHADR2 is expected to under-perform the Teladoc. But the stock apears to be less risky and, when comparing its historical volatility, HITACHI STRMACHADR2 is 2.6 times less risky than Teladoc. The stock trades about -0.02 of its potential returns per unit of risk. The Teladoc is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  595.00  in Teladoc on April 20, 2025 and sell it today you would earn a total of  82.00  from holding Teladoc or generate 13.78% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

HITACHI STRMACHADR2  vs.  Teladoc

HITACHI STRMACHADR2

Risk-Adjusted Performance

Very Weak

Over the last 90 days HITACHI STRMACHADR2 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, HITACHI STRMACHADR2 is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Teladoc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Teladoc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Teladoc reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HITACHI STRMACHADR2 and Teladoc

The main advantage of trading using opposite HITACHI STRMACHADR2 and Teladoc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HITACHI STRMACHADR2 position performs unexpectedly, Teladoc 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 Teladoc will offset losses from the drop in Teladoc's long position.

The idea behind HITACHI STRMACHADR2 and Teladoc 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.