Correlation Between Teradyne and Joint Corp

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

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

Diversification Opportunities for Teradyne and Joint Corp

-0.57

Correlation Coefficient

Teradyne  Joint Corp

Excellent diversification

The 3 months correlation between Teradyne and Joint is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Teradyne and The Joint Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Joint Corp 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 Joint Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Joint Corp has no effect on the direction of Teradyne i.e., Teradyne and Joint Corp go up and down completely randomly.

Pair Corralation between Teradyne and Joint Corp

Considering the 90-day investment horizon Teradyne is expected to generate 0.9 times more return on investment than Joint Corp. However, Teradyne is 1.11 times less risky than Joint Corp. It trades about 0.06 of its potential returns per unit of risk. The Joint Corp is currently generating about -0.01 per unit of risk. If you would invest  10,556  in Teradyne on October 9, 2024 and sell it today you would earn a total of  3,326  from holding Teradyne or generate 31.51% return on investment over 90 days.

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

Teradyne  vs.  The Joint Corp

Teradyne

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Teradyne are ranked lower than 4 (%) 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.

Joint Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Joint Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Joint Corp is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Teradyne and Joint Corp

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

The idea behind Teradyne and The Joint Corp 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.