Correlation Between Teradata Corp and Santacruz Silver

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

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

Diversification Opportunities for Teradata Corp and Santacruz Silver

-0.79

Correlation Coefficient

Teradata Corp  Santacruz Silver

Pay attention - limited upside

The 3 months correlation between Teradata and Santacruz is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Teradata Corp and Santacruz Silver Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Santacruz Silver Mining and Teradata Corp 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 Teradata Corp are associated (or correlated) with Santacruz Silver. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Santacruz Silver Mining has no effect on the direction of Teradata Corp i.e., Teradata Corp and Santacruz Silver go up and down completely randomly.

Pair Corralation between Teradata Corp and Santacruz Silver

Assuming the 90 days horizon Teradata Corp is expected to under-perform the Santacruz Silver. But the stock apears to be less risky and, when comparing its historical volatility, Teradata Corp is 2.44 times less risky than Santacruz Silver. The stock trades about -0.24 of its potential returns per unit of risk. The Santacruz Silver Mining is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  18.00  in Santacruz Silver Mining on December 22, 2024 and sell it today you would earn a total of  18.00  from holding Santacruz Silver Mining or generate 100.0% return on investment over 90 days.

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

Teradata Corp  vs.  Santacruz Silver Mining

Teradata Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Teradata Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Santacruz Silver Mining

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Santacruz Silver Mining are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Santacruz Silver reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Teradata Corp and Santacruz Silver

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

The idea behind Teradata Corp and Santacruz Silver Mining 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.

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 the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.