Correlation Between TERADATA and LEWAG HOLDING
Can any of the company-specific risk be diversified away by investing in both TERADATA and LEWAG HOLDING 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 LEWAG HOLDING into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TERADATA and LEWAG HOLDING AG, you can compare the effects of market volatilities on TERADATA and LEWAG HOLDING 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 LEWAG HOLDING. Check out your portfolio center. Please also check ongoing floating volatility patterns of TERADATA and LEWAG HOLDING.
Diversification Opportunities for TERADATA and LEWAG HOLDING
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between TERADATA and LEWAG is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding TERADATA and LEWAG HOLDING AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LEWAG HOLDING AG 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 LEWAG HOLDING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LEWAG HOLDING AG has no effect on the direction of TERADATA i.e., TERADATA and LEWAG HOLDING go up and down completely randomly.
Pair Corralation between TERADATA and LEWAG HOLDING
Assuming the 90 days trading horizon TERADATA is expected to generate 0.34 times more return on investment than LEWAG HOLDING. However, TERADATA is 2.93 times less risky than LEWAG HOLDING. It trades about -0.33 of its potential returns per unit of risk. LEWAG HOLDING AG is currently generating about -0.24 per unit of risk. If you would invest 3,080 in TERADATA on October 24, 2024 and sell it today you would lose (120.00) from holding TERADATA or give up 3.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 94.44% |
| Values | Daily Returns |
TERADATA vs. LEWAG HOLDING AG
Performance |
| Timeline |
| TERADATA |
| LEWAG HOLDING AG |
TERADATA and LEWAG HOLDING Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TERADATA and LEWAG HOLDING
The main advantage of trading using opposite TERADATA and LEWAG HOLDING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TERADATA position performs unexpectedly, LEWAG HOLDING 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 LEWAG HOLDING will offset losses from the drop in LEWAG HOLDING's long position.The idea behind TERADATA and LEWAG HOLDING AG 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.| LEWAG HOLDING vs. SPARTAN STORES | LEWAG HOLDING vs. X FAB Silicon Foundries | LEWAG HOLDING vs. China BlueChemical | LEWAG HOLDING vs. CHEMICAL INDUSTRIES |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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