Correlation Between Samsara and Teradyne

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

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

Diversification Opportunities for Samsara and Teradyne

-0.65

Correlation Coefficient

Samsara  Teradyne

Excellent diversification

The 3 months correlation between Samsara and Teradyne is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Samsara and Teradyne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teradyne and Samsara 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 Samsara 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 Samsara i.e., Samsara and Teradyne go up and down completely randomly.

Pair Corralation between Samsara and Teradyne

Considering the 90-day investment horizon Samsara is expected to generate 1.5 times more return on investment than Teradyne. However, Samsara is 1.5 times more volatile than Teradyne. It trades about 0.09 of its potential returns per unit of risk. Teradyne is currently generating about 0.04 per unit of risk. If you would invest  1,364  in Samsara on October 22, 2024 and sell it today you would earn a total of  3,323  from holding Samsara or generate 243.62% return on investment over 90 days.

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

Samsara  vs.  Teradyne

Samsara

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Samsara are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Samsara is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Teradyne

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Teradyne are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Teradyne may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Samsara and Teradyne

The main advantage of trading using opposite Samsara and Teradyne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samsara 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 Samsara 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.