Correlation Between Teradata Corp and Auction Technology
Can any of the company-specific risk be diversified away by investing in both Teradata Corp and Auction 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 Teradata Corp and Auction Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teradata Corp and Auction Technology Group, you can compare the effects of market volatilities on Teradata Corp and Auction 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 Teradata Corp with a short position of Auction Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teradata Corp and Auction Technology.
Diversification Opportunities for Teradata Corp and Auction Technology
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Teradata and Auction is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Teradata Corp and Auction Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Auction Technology and Teradata Corp 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 Teradata Corp are associated (or correlated) with Auction Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Auction Technology has no effect on the direction of Teradata Corp i.e., Teradata Corp and Auction Technology go up and down completely randomly.
Pair Corralation between Teradata Corp and Auction Technology
Assuming the 90 days trading horizon Teradata Corp is expected to generate 10.3 times less return on investment than Auction Technology. But when comparing it to its historical volatility, Teradata Corp is 1.18 times less risky than Auction Technology. It trades about 0.01 of its potential returns per unit of risk. Auction Technology Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 49,100 in Auction Technology Group on October 26, 2024 and sell it today you would earn a total of 11,400 from holding Auction Technology Group or generate 23.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 93.6% |
| Values | Daily Returns |
Teradata Corp vs. Auction Technology Group
Performance |
| Timeline |
| Teradata Corp |
| Auction Technology |
Teradata Corp and Auction Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teradata Corp and Auction Technology
The main advantage of trading using opposite Teradata Corp and Auction Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teradata Corp position performs unexpectedly, Auction 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 Auction Technology will offset losses from the drop in Auction Technology's long position.| Teradata Corp vs. Aeorema Communications Plc | Teradata Corp vs. Charter Communications Cl | Teradata Corp vs. Gamma Communications PLC | Teradata Corp vs. Batm Advanced Communications |
| Auction Technology vs. First Majestic Silver | Auction Technology vs. Invesco Physical Silver | Auction Technology vs. AcadeMedia AB | Auction Technology vs. Blackrock World Mining |
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 CEOs Directory module to screen CEOs from public companies around the world.
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