Correlation Between TERADATA and REGIONS FINANCIAL
Can any of the company-specific risk be diversified away by investing in both TERADATA and REGIONS FINANCIAL 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 REGIONS FINANCIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TERADATA and REGIONS FINANCIAL PFD, you can compare the effects of market volatilities on TERADATA and REGIONS FINANCIAL 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 REGIONS FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of TERADATA and REGIONS FINANCIAL.
Diversification Opportunities for TERADATA and REGIONS FINANCIAL
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between TERADATA and REGIONS is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding TERADATA and REGIONS FINANCIAL PFD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REGIONS FINANCIAL PFD 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 REGIONS FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REGIONS FINANCIAL PFD has no effect on the direction of TERADATA i.e., TERADATA and REGIONS FINANCIAL go up and down completely randomly.
Pair Corralation between TERADATA and REGIONS FINANCIAL
Assuming the 90 days trading horizon TERADATA is expected to generate 0.55 times more return on investment than REGIONS FINANCIAL. However, TERADATA is 1.83 times less risky than REGIONS FINANCIAL. It trades about 0.54 of its potential returns per unit of risk. REGIONS FINANCIAL PFD is currently generating about -0.06 per unit of risk. If you would invest 2,780 in TERADATA on September 13, 2024 and sell it today you would earn a total of 280.00 from holding TERADATA or generate 10.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TERADATA vs. REGIONS FINANCIAL PFD
Performance |
| Timeline |
| TERADATA |
| REGIONS FINANCIAL PFD |
TERADATA and REGIONS FINANCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TERADATA and REGIONS FINANCIAL
The main advantage of trading using opposite TERADATA and REGIONS FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TERADATA position performs unexpectedly, REGIONS FINANCIAL 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 REGIONS FINANCIAL will offset losses from the drop in REGIONS FINANCIAL's long position.The idea behind TERADATA and REGIONS FINANCIAL PFD 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.| REGIONS FINANCIAL vs. ANGLER GAMING PLC | REGIONS FINANCIAL vs. ATRYS HEALTH SA | REGIONS FINANCIAL vs. CI GAMES SA | REGIONS FINANCIAL vs. Penn National Gaming |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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