Correlation Between Teradyne and Ihuman

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

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

Diversification Opportunities for Teradyne and Ihuman

0.58

Correlation Coefficient

Teradyne  Ihuman

Very weak diversification

The 3 months correlation between Teradyne and Ihuman is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Teradyne and Ihuman Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ihuman Inc 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 Ihuman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ihuman Inc has no effect on the direction of Teradyne i.e., Teradyne and Ihuman go up and down completely randomly.

Pair Corralation between Teradyne and Ihuman

Considering the 90-day investment horizon Teradyne is expected to generate 0.9 times more return on investment than Ihuman. However, Teradyne is 1.11 times less risky than Ihuman. It trades about 0.24 of its potential returns per unit of risk. Ihuman Inc is currently generating about -0.1 per unit of risk. If you would invest  11,956  in Teradyne on October 8, 2024 and sell it today you would earn a total of  1,104  from holding Teradyne or generate 9.23% return on investment over 90 days.

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

Teradyne  vs.  Ihuman Inc

Teradyne

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Teradyne are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Ihuman Inc

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Teradyne and Ihuman

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

The idea behind Teradyne and Ihuman Inc 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.