Correlation Between Teradyne and AudioCodes
Can any of the company-specific risk be diversified away by investing in both Teradyne and AudioCodes 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 AudioCodes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teradyne and AudioCodes, you can compare the effects of market volatilities on Teradyne and AudioCodes 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 AudioCodes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teradyne and AudioCodes.
Diversification Opportunities for Teradyne and AudioCodes
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Teradyne and AudioCodes is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Teradyne and AudioCodes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AudioCodes 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 AudioCodes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AudioCodes has no effect on the direction of Teradyne i.e., Teradyne and AudioCodes go up and down completely randomly.
Pair Corralation between Teradyne and AudioCodes
Considering the 90-day investment horizon Teradyne is expected to generate 0.82 times more return on investment than AudioCodes. However, Teradyne is 1.22 times less risky than AudioCodes. It trades about 0.03 of its potential returns per unit of risk. AudioCodes is currently generating about -0.03 per unit of risk. If you would invest 9,069 in Teradyne on August 28, 2024 and sell it today you would earn a total of 1,998 from holding Teradyne or generate 22.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teradyne vs. AudioCodes
Performance |
| Timeline |
| Teradyne |
| AudioCodes |
Teradyne and AudioCodes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teradyne and AudioCodes
The main advantage of trading using opposite Teradyne and AudioCodes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teradyne position performs unexpectedly, AudioCodes 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 AudioCodes will offset losses from the drop in AudioCodes' long position.| Teradyne vs. IPG Photonics | Teradyne vs. Ultra Clean Holdings | Teradyne vs. Onto Innovation | Teradyne vs. Cohu Inc |
| AudioCodes vs. Aviat Networks | AudioCodes vs. Silicom | AudioCodes vs. Akoustis Technologies | AudioCodes vs. Gilat Satellite Networks |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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