Correlation Between QUEEN S and Teradata Corp

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

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

Diversification Opportunities for QUEEN S and Teradata Corp

0.59

Correlation Coefficient

QUEEN S  Teradata Corp

Very weak diversification

The 3 months correlation between QUEEN and Teradata is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding QUEEN S ROAD and Teradata Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teradata Corp and QUEEN S 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 QUEEN S ROAD are associated (or correlated) with Teradata Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teradata Corp has no effect on the direction of QUEEN S i.e., QUEEN S and Teradata Corp go up and down completely randomly.

Pair Corralation between QUEEN S and Teradata Corp

Assuming the 90 days horizon QUEEN S ROAD is expected to generate 0.88 times more return on investment than Teradata Corp. However, QUEEN S ROAD is 1.13 times less risky than Teradata Corp. It trades about -0.14 of its potential returns per unit of risk. Teradata Corp is currently generating about -0.24 per unit of risk. If you would invest  466.00  in QUEEN S ROAD on December 20, 2024 and sell it today you would lose (84.00) from holding QUEEN S ROAD or give up 18.03% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.31%
Values	Daily Returns

QUEEN S ROAD  vs.  Teradata Corp

QUEEN S ROAD

Risk-Adjusted Performance

Very Weak

Over the last 90 days QUEEN S ROAD 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.

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.

Pair Trading with QUEEN S and Teradata Corp

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

The idea behind QUEEN S ROAD and Teradata Corp 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.