Correlation Between Impinj and Teradyne

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

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

Diversification Opportunities for Impinj and Teradyne

0.35

Correlation Coefficient

Impinj  Teradyne

Weak diversification

The 3 months correlation between Impinj and Teradyne is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Impinj Inc and Teradyne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teradyne and Impinj 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 Impinj Inc 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 Impinj i.e., Impinj and Teradyne go up and down completely randomly.

Pair Corralation between Impinj and Teradyne

Allowing for the 90-day total investment horizon Impinj Inc is expected to generate 1.64 times more return on investment than Teradyne. However, Impinj is 1.64 times more volatile than Teradyne. It trades about 0.04 of its potential returns per unit of risk. Teradyne is currently generating about 0.05 per unit of risk. If you would invest  11,026  in Impinj Inc on September 24, 2024 and sell it today you would earn a total of  3,588  from holding Impinj Inc or generate 32.54% return on investment over 90 days.

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

Impinj Inc  vs.  Teradyne

Impinj Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Impinj Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Teradyne

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Teradyne has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Teradyne is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Impinj and Teradyne

The main advantage of trading using opposite Impinj and Teradyne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impinj 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 Impinj Inc 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.