Correlation Between WiSA Technologies and Teradyne

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

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

Diversification Opportunities for WiSA Technologies and Teradyne

-0.34

Correlation Coefficient

WiSA Technologies  Teradyne

Very good diversification

The 3 months correlation between WiSA and Teradyne is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding WiSA Technologies and Teradyne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teradyne and WiSA Technologies 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 WiSA Technologies 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 WiSA Technologies i.e., WiSA Technologies and Teradyne go up and down completely randomly.

Pair Corralation between WiSA Technologies and Teradyne

Given the investment horizon of 90 days WiSA Technologies is expected to generate 2.37 times less return on investment than Teradyne. In addition to that, WiSA Technologies is 1.37 times more volatile than Teradyne. It trades about 0.09 of its total potential returns per unit of risk. Teradyne is currently generating about 0.3 per unit of volatility. If you would invest  11,067  in Teradyne on September 24, 2024 and sell it today you would earn a total of  1,528  from holding Teradyne or generate 13.81% return on investment over 90 days.

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

WiSA Technologies  vs.  Teradyne

WiSA Technologies

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days WiSA Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

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. 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.

Pair Trading with WiSA Technologies and Teradyne

The main advantage of trading using opposite WiSA Technologies and Teradyne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WiSA Technologies 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 WiSA Technologies 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.