Correlation Between Teradyne and CRAWFORD A

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

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

Diversification Opportunities for Teradyne and CRAWFORD A

-0.48

Correlation Coefficient

Teradyne  CRAWFORD A

Very good diversification

The 3 months correlation between Teradyne and CRAWFORD is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Teradyne and CRAWFORD A NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CRAWFORD A NV 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 CRAWFORD A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CRAWFORD A NV has no effect on the direction of Teradyne i.e., Teradyne and CRAWFORD A go up and down completely randomly.

Pair Corralation between Teradyne and CRAWFORD A

Assuming the 90 days horizon Teradyne is expected to under-perform the CRAWFORD A. In addition to that, Teradyne is 1.43 times more volatile than CRAWFORD A NV. It trades about -0.02 of its total potential returns per unit of risk. CRAWFORD A NV is currently generating about 0.13 per unit of volatility. If you would invest  763.00  in CRAWFORD A NV on September 27, 2024 and sell it today you would earn a total of  297.00  from holding CRAWFORD A NV or generate 38.93% 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.  CRAWFORD A NV

Teradyne

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Teradyne has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Teradyne is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

CRAWFORD A NV

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in CRAWFORD A NV are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile forward-looking signals, CRAWFORD A reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Teradyne and CRAWFORD A

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

The idea behind Teradyne and CRAWFORD A NV 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.