Correlation Between TERADATA and Gold Road
Can any of the company-specific risk be diversified away by investing in both TERADATA and Gold Road 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 and Gold Road into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TERADATA and Gold Road Resources, you can compare the effects of market volatilities on TERADATA and Gold Road 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 with a short position of Gold Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of TERADATA and Gold Road.
Diversification Opportunities for TERADATA and Gold Road
Almost no diversification
The 3 months correlation between TERADATA and Gold is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding TERADATA and Gold Road Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Road Resources and TERADATA 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 are associated (or correlated) with Gold Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Road Resources has no effect on the direction of TERADATA i.e., TERADATA and Gold Road go up and down completely randomly.
Pair Corralation between TERADATA and Gold Road
Assuming the 90 days trading horizon TERADATA is expected to generate 0.34 times more return on investment than Gold Road. However, TERADATA is 2.95 times less risky than Gold Road. It trades about 0.47 of its potential returns per unit of risk. Gold Road Resources is currently generating about 0.09 per unit of risk. If you would invest 2,820 in TERADATA on September 22, 2024 and sell it today you would earn a total of 260.00 from holding TERADATA or generate 9.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
TERADATA vs. Gold Road Resources
Performance |
| Timeline |
| TERADATA |
| Gold Road Resources |
TERADATA and Gold Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TERADATA and Gold Road
The main advantage of trading using opposite TERADATA and Gold Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TERADATA position performs unexpectedly, Gold Road 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 Gold Road will offset losses from the drop in Gold Road's long position.The idea behind TERADATA and Gold Road Resources 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.| Gold Road vs. Cass Information Systems | Gold Road vs. INFORMATION SVC GRP | Gold Road vs. Chalice Mining Limited | Gold Road vs. TERADATA |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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