Correlation Between Boiron SA and TERADATA

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

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

Diversification Opportunities for Boiron SA and TERADATA

-0.59

Correlation Coefficient

Boiron SA  TERADATA

Excellent diversification

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

Pair Corralation between Boiron SA and TERADATA

Assuming the 90 days horizon Boiron SA is expected to under-perform the TERADATA. But the stock apears to be less risky and, when comparing its historical volatility, Boiron SA is 1.01 times less risky than TERADATA. The stock trades about -0.06 of its potential returns per unit of risk. The TERADATA is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  3,960  in TERADATA on September 24, 2024 and sell it today you would lose (880.00) from holding TERADATA or give up 22.22% of portfolio value over 90 days.

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

Boiron SA  vs.  TERADATA

Boiron SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boiron SA 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 January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

TERADATA

Risk-Adjusted Performance

15 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in TERADATA are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, TERADATA unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Boiron SA and TERADATA

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

The idea behind Boiron SA and TERADATA 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.