Correlation Between Litigation Capital and Teradata Corp
Can any of the company-specific risk be diversified away by investing in both Litigation Capital 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 Litigation Capital and Teradata Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Litigation Capital Management and Teradata Corp, you can compare the effects of market volatilities on Litigation Capital 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 Litigation Capital with a short position of Teradata Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Litigation Capital and Teradata Corp.
Diversification Opportunities for Litigation Capital and Teradata Corp
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Litigation and Teradata is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Litigation Capital Management and Teradata Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teradata Corp and Litigation Capital 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 Litigation Capital Management 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 Litigation Capital i.e., Litigation Capital and Teradata Corp go up and down completely randomly.
Pair Corralation between Litigation Capital and Teradata Corp
Assuming the 90 days trading horizon Litigation Capital Management is expected to generate 0.94 times more return on investment than Teradata Corp. However, Litigation Capital Management is 1.06 times less risky than Teradata Corp. It trades about 0.04 of its potential returns per unit of risk. Teradata Corp is currently generating about 0.0 per unit of risk. If you would invest 6,817 in Litigation Capital Management on October 16, 2024 and sell it today you would earn a total of 3,083 from holding Litigation Capital Management or generate 45.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 84.91% |
| Values | Daily Returns |
Litigation Capital Management vs. Teradata Corp
Performance |
| Timeline |
| Litigation Capital |
| Teradata Corp |
Litigation Capital and Teradata Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Litigation Capital and Teradata Corp
The main advantage of trading using opposite Litigation Capital and Teradata Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Litigation Capital 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.| Litigation Capital vs. Pressure Technologies Plc | Litigation Capital vs. Monster Beverage Corp | Litigation Capital vs. Young Cos Brewery | Litigation Capital vs. Nordic Semiconductor ASA |
| Teradata Corp vs. Nordic Semiconductor ASA | Teradata Corp vs. BE Semiconductor Industries | Teradata Corp vs. Molson Coors Beverage | Teradata Corp vs. Litigation Capital Management |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation |