Correlation Between Teradyne and Acm Research
Can any of the company-specific risk be diversified away by investing in both Teradyne and Acm Research 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 Teradyne and Acm Research into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teradyne and Acm Research, you can compare the effects of market volatilities on Teradyne and Acm Research 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 Teradyne with a short position of Acm Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teradyne and Acm Research.
Diversification Opportunities for Teradyne and Acm Research
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Teradyne and Acm is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Teradyne and Acm Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acm Research and Teradyne 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 Teradyne are associated (or correlated) with Acm Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acm Research has no effect on the direction of Teradyne i.e., Teradyne and Acm Research go up and down completely randomly.
Pair Corralation between Teradyne and Acm Research
Considering the 90-day investment horizon Teradyne is expected to generate 4.24 times less return on investment than Acm Research. But when comparing it to its historical volatility, Teradyne is 2.01 times less risky than Acm Research. It trades about 0.03 of its potential returns per unit of risk. Acm Research is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 916.00 in Acm Research on August 25, 2024 and sell it today you would earn a total of 963.00 from holding Acm Research or generate 105.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teradyne vs. Acm Research
Performance |
| Timeline |
| Teradyne |
| Acm Research |
Teradyne and Acm Research Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teradyne and Acm Research
The main advantage of trading using opposite Teradyne and Acm Research positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teradyne position performs unexpectedly, Acm Research 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 Acm Research will offset losses from the drop in Acm Research's long position.| Teradyne vs. IPG Photonics | Teradyne vs. Ultra Clean Holdings | Teradyne vs. Onto Innovation | Teradyne vs. Cohu Inc |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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