Correlation Between SCREEN Holdings and Teradyne
Can any of the company-specific risk be diversified away by investing in both SCREEN Holdings and Teradyne 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 SCREEN Holdings and Teradyne into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCREEN Holdings Co and Teradyne, you can compare the effects of market volatilities on SCREEN Holdings and Teradyne 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 SCREEN Holdings with a short position of Teradyne. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCREEN Holdings and Teradyne.
Diversification Opportunities for SCREEN Holdings and Teradyne
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SCREEN and Teradyne is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding SCREEN Holdings Co and Teradyne in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teradyne and SCREEN Holdings 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 SCREEN Holdings Co are associated (or correlated) with Teradyne. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teradyne has no effect on the direction of SCREEN Holdings i.e., SCREEN Holdings and Teradyne go up and down completely randomly.
Pair Corralation between SCREEN Holdings and Teradyne
Assuming the 90 days horizon SCREEN Holdings Co is expected to under-perform the Teradyne. In addition to that, SCREEN Holdings is 1.83 times more volatile than Teradyne. It trades about -0.23 of its total potential returns per unit of risk. Teradyne is currently generating about 0.02 per unit of volatility. If you would invest 10,340 in Teradyne on August 27, 2024 and sell it today you would earn a total of 481.00 from holding Teradyne or generate 4.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 29.26% |
| Values | Daily Returns |
SCREEN Holdings Co vs. Teradyne
Performance |
| Timeline |
| SCREEN Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Teradyne |
SCREEN Holdings and Teradyne Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCREEN Holdings and Teradyne
The main advantage of trading using opposite SCREEN Holdings and Teradyne positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCREEN Holdings position performs unexpectedly, Teradyne 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 Teradyne will offset losses from the drop in Teradyne's long position.| SCREEN Holdings vs. ASML Holding NV | SCREEN Holdings vs. Applied Materials | SCREEN Holdings vs. Lam Research Corp | SCREEN Holdings vs. KLA Tencor |
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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