Correlation Between Healthequity and Teladoc Health

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Can any of the company-specific risk be diversified away by investing in both Healthequity and Teladoc Health 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 Healthequity and Teladoc Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Healthequity and Teladoc Health, you can compare the effects of market volatilities on Healthequity and Teladoc Health 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 Healthequity with a short position of Teladoc Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Healthequity and Teladoc Health.

Diversification Opportunities for Healthequity and Teladoc Health

-0.21
  Correlation Coefficient

Very good diversification

The 3 months correlation between Healthequity and Teladoc is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Healthequity and Teladoc Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teladoc Health and Healthequity 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 Healthequity are associated (or correlated) with Teladoc Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teladoc Health has no effect on the direction of Healthequity i.e., Healthequity and Teladoc Health go up and down completely randomly.

Pair Corralation between Healthequity and Teladoc Health

Considering the 90-day investment horizon Healthequity is expected to generate 0.45 times more return on investment than Teladoc Health. However, Healthequity is 2.21 times less risky than Teladoc Health. It trades about -0.02 of its potential returns per unit of risk. Teladoc Health is currently generating about -0.05 per unit of risk. If you would invest  6,185  in Healthequity on May 11, 2022 and sell it today you would lose (110.00)  from holding Healthequity or give up 1.78% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Healthequity  vs.  Teladoc Health

 Performance (%) 
       Timeline  
Healthequity 
Healthequity Performance
6 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Healthequity are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Healthequity showed solid returns over the last few months and may actually be approaching a breakup point.

Healthequity Price Channel

Teladoc Health 
Teladoc Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Teladoc Health are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Teladoc Health sustained solid returns over the last few months and may actually be approaching a breakup point.

Teladoc Price Channel

Healthequity and Teladoc Health Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Healthequity and Teladoc Health

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

Teladoc Health

Pair trading matchups for Teladoc Health

Check out your portfolio center. 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.

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