Correlation Between Teradata Corp and Samsung Electronics
Can any of the company-specific risk be diversified away by investing in both Teradata Corp and Samsung Electronics 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 Samsung Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teradata Corp and Samsung Electronics Co, you can compare the effects of market volatilities on Teradata Corp and Samsung Electronics 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 Samsung Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teradata Corp and Samsung Electronics.
Diversification Opportunities for Teradata Corp and Samsung Electronics
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Teradata and Samsung is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Teradata Corp and Samsung Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samsung Electronics 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 Samsung Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samsung Electronics has no effect on the direction of Teradata Corp i.e., Teradata Corp and Samsung Electronics go up and down completely randomly.
Pair Corralation between Teradata Corp and Samsung Electronics
Assuming the 90 days horizon Teradata Corp is expected to generate 1.09 times more return on investment than Samsung Electronics. However, Teradata Corp is 1.09 times more volatile than Samsung Electronics Co. It trades about 0.01 of its potential returns per unit of risk. Samsung Electronics Co is currently generating about -0.01 per unit of risk. If you would invest 3,053 in Teradata Corp on October 13, 2024 and sell it today you would lose (53.00) from holding Teradata Corp or give up 1.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teradata Corp vs. Samsung Electronics Co
Performance |
| Timeline |
| Teradata Corp |
| Samsung Electronics |
Teradata Corp and Samsung Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teradata Corp and Samsung Electronics
The main advantage of trading using opposite Teradata Corp and Samsung Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teradata Corp position performs unexpectedly, Samsung Electronics 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 Samsung Electronics will offset losses from the drop in Samsung Electronics' long position.| Teradata Corp vs. Marie Brizard Wine | Teradata Corp vs. INTERSHOP Communications Aktiengesellschaft | Teradata Corp vs. T MOBILE INCDL 00001 | Teradata Corp vs. WillScot Mobile Mini |
| Samsung Electronics vs. Alliance Data Systems | Samsung Electronics vs. Teradata Corp | Samsung Electronics vs. PRECISION DRILLING P | Samsung Electronics vs. Columbia Sportswear |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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