Correlation Between MOUNT GIBSON and TERADYNE

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

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

Diversification Opportunities for MOUNT GIBSON and TERADYNE

0.09

Correlation Coefficient

MOUNT GIBSON  TERADYNE

Significant diversification

The 3 months correlation between MOUNT and TERADYNE is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding MOUNT GIBSON IRON and TERADYNE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TERADYNE and MOUNT GIBSON 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 MOUNT GIBSON IRON are associated (or correlated) with TERADYNE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TERADYNE has no effect on the direction of MOUNT GIBSON i.e., MOUNT GIBSON and TERADYNE go up and down completely randomly.

Pair Corralation between MOUNT GIBSON and TERADYNE

Assuming the 90 days trading horizon MOUNT GIBSON IRON is expected to generate 0.84 times more return on investment than TERADYNE. However, MOUNT GIBSON IRON is 1.19 times less risky than TERADYNE. It trades about 0.05 of its potential returns per unit of risk. TERADYNE is currently generating about -0.21 per unit of risk. If you would invest  17.00  in MOUNT GIBSON IRON on December 22, 2024 and sell it today you would earn a total of  1.00  from holding MOUNT GIBSON IRON or generate 5.88% return on investment over 90 days.

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

MOUNT GIBSON IRON  vs.  TERADYNE

MOUNT GIBSON IRON

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MOUNT GIBSON IRON are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, MOUNT GIBSON may actually be approaching a critical reversion point that can send shares even higher in April 2025.

TERADYNE

Risk-Adjusted Performance

Very Weak

Over the last 90 days TERADYNE 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.

Pair Trading with MOUNT GIBSON and TERADYNE

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

The idea behind MOUNT GIBSON IRON and TERADYNE 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.