Correlation Between Teradyne and American Scientf

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

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

Diversification Opportunities for Teradyne and American Scientf

-0.03

Correlation Coefficient

Teradyne  American Scientf

Good diversification

The 3 months correlation between Teradyne and American is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Teradyne and American Scientf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Scientf and Teradyne 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 Teradyne are associated (or correlated) with American Scientf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Scientf has no effect on the direction of Teradyne i.e., Teradyne and American Scientf go up and down completely randomly.

Pair Corralation between Teradyne and American Scientf

If you would invest  0.01  in American Scientf on December 21, 2024 and sell it today you would lose  0.00  from holding American Scientf or give up 0.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Teradyne  vs.  American Scientf

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. Even with weak performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

American Scientf

Risk-Adjusted Performance

Very Weak

Over the last 90 days American Scientf has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, American Scientf is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Teradyne and American Scientf

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

The idea behind Teradyne and American Scientf 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.