Correlation Between Teradyne and Alpha Technology

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Teradyne and Alpha Technology 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 Alpha Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teradyne and Alpha Technology Group, you can compare the effects of market volatilities on Teradyne and Alpha Technology 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 Alpha Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teradyne and Alpha Technology.

Diversification Opportunities for Teradyne and Alpha Technology

-0.75
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Teradyne and Alpha is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Teradyne and Alpha Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alpha Technology 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 Alpha Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alpha Technology has no effect on the direction of Teradyne i.e., Teradyne and Alpha Technology go up and down completely randomly.

Pair Corralation between Teradyne and Alpha Technology

Considering the 90-day investment horizon Teradyne is expected to generate 3.01 times less return on investment than Alpha Technology. But when comparing it to its historical volatility, Teradyne is 4.3 times less risky than Alpha Technology. It trades about 0.05 of its potential returns per unit of risk. Alpha Technology Group is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  2,819  in Alpha Technology Group on September 14, 2024 and sell it today you would lose (1,076) from holding Alpha Technology Group or give up 38.17% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Teradyne  vs.  Alpha Technology Group

 Performance 
       Timeline  
Teradyne 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Teradyne has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable technical and fundamental indicators, Teradyne is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.
Alpha Technology 

Risk-Adjusted Performance

23 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Alpha Technology Group are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical and fundamental indicators, Alpha Technology disclosed solid returns over the last few months and may actually be approaching a breakup point.

Teradyne and Alpha Technology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Teradyne and Alpha Technology

The main advantage of trading using opposite Teradyne and Alpha Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teradyne position performs unexpectedly, Alpha Technology 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 Alpha Technology will offset losses from the drop in Alpha Technology's long position.
The idea behind Teradyne and Alpha Technology Group 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.
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.

Other Complementary Tools

Equity Valuation
Check real value of public entities based on technical and fundamental data
Instant Ratings
Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Odds Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Stock Tickers
Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites