Correlation Between TERADATA and WINMARK
Can any of the company-specific risk be diversified away by investing in both TERADATA and WINMARK 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 WINMARK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TERADATA and WINMARK, you can compare the effects of market volatilities on TERADATA and WINMARK 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 WINMARK. Check out your portfolio center. Please also check ongoing floating volatility patterns of TERADATA and WINMARK.
Diversification Opportunities for TERADATA and WINMARK
Very weak diversification
The 3 months correlation between TERADATA and WINMARK is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding TERADATA and WINMARK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WINMARK 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 WINMARK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WINMARK has no effect on the direction of TERADATA i.e., TERADATA and WINMARK go up and down completely randomly.
Pair Corralation between TERADATA and WINMARK
Assuming the 90 days trading horizon TERADATA is expected to generate 0.36 times more return on investment than WINMARK. However, TERADATA is 2.76 times less risky than WINMARK. It trades about 0.58 of its potential returns per unit of risk. WINMARK is currently generating about 0.02 per unit of risk. If you would invest 2,780 in TERADATA on September 14, 2024 and sell it today you would earn a total of 300.00 from holding TERADATA or generate 10.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TERADATA vs. WINMARK
Performance |
| Timeline |
| TERADATA |
| WINMARK |
TERADATA and WINMARK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TERADATA and WINMARK
The main advantage of trading using opposite TERADATA and WINMARK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TERADATA position performs unexpectedly, WINMARK 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 WINMARK will offset losses from the drop in WINMARK's long position.| TERADATA vs. QINGCI GAMES INC | TERADATA vs. Media and Games | TERADATA vs. Ribbon Communications | TERADATA vs. Chunghwa Telecom Co |
| WINMARK vs. TERADATA | WINMARK vs. DOCDATA | WINMARK vs. Gaztransport Technigaz SA | WINMARK vs. Cass Information Systems |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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