Correlation Between TERADYNE and TERADYNE

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

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

Diversification Opportunities for TERADYNE and TERADYNE

0.91

Correlation Coefficient

TERADYNE  TERADYNE

Almost no diversification

The 3 months correlation between TERADYNE and TERADYNE is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding TERADYNE and TERADYNE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TERADYNE 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 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 TERADYNE i.e., TERADYNE and TERADYNE go up and down completely randomly.

Pair Corralation between TERADYNE and TERADYNE

Assuming the 90 days trading horizon TERADYNE is expected to generate 1.21 times less return on investment than TERADYNE. In addition to that, TERADYNE is 1.1 times more volatile than TERADYNE. It trades about 0.24 of its total potential returns per unit of risk. TERADYNE is currently generating about 0.32 per unit of volatility. If you would invest  9,931  in TERADYNE on October 7, 2024 and sell it today you would earn a total of  2,355  from holding TERADYNE or generate 23.71% return on investment over 90 days.

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

TERADYNE  vs.  TERADYNE

TERADYNE

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TERADYNE are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, TERADYNE is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

TERADYNE

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in TERADYNE are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, TERADYNE is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with TERADYNE and TERADYNE

The main advantage of trading using opposite TERADYNE and TERADYNE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TERADYNE 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 TERADYNE 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.