Correlation Between John Bean and Teradata Corp
Can any of the company-specific risk be diversified away by investing in both John Bean and Teradata Corp 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 John Bean and Teradata Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between John Bean Technologies and Teradata Corp, you can compare the effects of market volatilities on John Bean and Teradata Corp 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 John Bean with a short position of Teradata Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of John Bean and Teradata Corp.
Diversification Opportunities for John Bean and Teradata Corp
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between John and Teradata is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding John Bean Technologies and Teradata Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teradata Corp and John Bean 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 John Bean Technologies are associated (or correlated) with Teradata Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teradata Corp has no effect on the direction of John Bean i.e., John Bean and Teradata Corp go up and down completely randomly.
Pair Corralation between John Bean and Teradata Corp
Assuming the 90 days horizon John Bean Technologies is expected to generate 1.03 times more return on investment than Teradata Corp. However, John Bean is 1.03 times more volatile than Teradata Corp. It trades about 0.06 of its potential returns per unit of risk. Teradata Corp is currently generating about -0.05 per unit of risk. If you would invest 9,060 in John Bean Technologies on November 3, 2024 and sell it today you would earn a total of 3,140 from holding John Bean Technologies or generate 34.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
John Bean Technologies vs. Teradata Corp
Performance |
| Timeline |
| John Bean Technologies |
| Teradata Corp |
John Bean and Teradata Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with John Bean and Teradata Corp
The main advantage of trading using opposite John Bean and Teradata Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if John Bean position performs unexpectedly, Teradata Corp 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 Teradata Corp will offset losses from the drop in Teradata Corp's long position.| John Bean vs. JIAHUA STORES | John Bean vs. PICKN PAY STORES | John Bean vs. H2O Retailing | John Bean vs. United Airlines Holdings |
| Teradata Corp vs. SEKISUI CHEMICAL | Teradata Corp vs. TIANDE CHEMICAL | Teradata Corp vs. FORWARD AIR P | Teradata Corp vs. Westinghouse Air Brake |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |