Correlation Between Teradyne and KULR Technology

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

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

Diversification Opportunities for Teradyne and KULR Technology

0.68

Correlation Coefficient

Teradyne  KULR Technology

Poor diversification

The 3 months correlation between Teradyne and KULR is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Teradyne and KULR Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KULR Technology Group 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 KULR Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KULR Technology Group has no effect on the direction of Teradyne i.e., Teradyne and KULR Technology go up and down completely randomly.

Pair Corralation between Teradyne and KULR Technology

Considering the 90-day investment horizon Teradyne is expected to generate 0.39 times more return on investment than KULR Technology. However, Teradyne is 2.54 times less risky than KULR Technology. It trades about -0.17 of its potential returns per unit of risk. KULR Technology Group is currently generating about -0.16 per unit of risk. If you would invest  12,657  in Teradyne on December 29, 2024 and sell it today you would lose (4,089) from holding Teradyne or give up 32.31% of portfolio value over 90 days.

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

Teradyne  vs.  KULR Technology Group

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.

KULR Technology Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days KULR Technology Group has generated negative risk-adjusted returns adding no value to investors with long positions. Even with conflicting performance in the last few months, the Stock's essential 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.

Pair Trading with Teradyne and KULR Technology

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

The idea behind Teradyne and KULR Technology Group 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.