Correlation Between TERADATA and Kaufman Broad

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

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

Diversification Opportunities for TERADATA and Kaufman Broad

-0.16

Correlation Coefficient

TERADATA  Kaufman Broad

Good diversification

The 3 months correlation between TERADATA and Kaufman is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding TERADATA and Kaufman Broad SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaufman Broad SA and TERADATA 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 are associated (or correlated) with Kaufman Broad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaufman Broad SA has no effect on the direction of TERADATA i.e., TERADATA and Kaufman Broad go up and down completely randomly.

Pair Corralation between TERADATA and Kaufman Broad

Assuming the 90 days trading horizon TERADATA is expected to under-perform the Kaufman Broad. In addition to that, TERADATA is 1.22 times more volatile than Kaufman Broad SA. It trades about -0.21 of its total potential returns per unit of risk. Kaufman Broad SA is currently generating about 0.01 per unit of volatility. If you would invest  3,200  in Kaufman Broad SA on December 30, 2024 and sell it today you would earn a total of  20.00  from holding Kaufman Broad SA or generate 0.63% return on investment over 90 days.

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

TERADATA  vs.  Kaufman Broad SA

TERADATA

Risk-Adjusted Performance

Very Weak

Over the last 90 days TERADATA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Kaufman Broad SA

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kaufman Broad SA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Kaufman Broad is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with TERADATA and Kaufman Broad

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

The idea behind TERADATA and Kaufman Broad SA 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..