Correlation Between Teradyne and Here Media
Can any of the company-specific risk be diversified away by investing in both Teradyne and Here Media 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 Here Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teradyne and Here Media, you can compare the effects of market volatilities on Teradyne and Here Media 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 Here Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teradyne and Here Media.
Diversification Opportunities for Teradyne and Here Media
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Teradyne and Here is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Teradyne and Here Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Here Media 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 Here Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Here Media has no effect on the direction of Teradyne i.e., Teradyne and Here Media go up and down completely randomly.
Pair Corralation between Teradyne and Here Media
Considering the 90-day investment horizon Teradyne is expected to generate 3.66 times less return on investment than Here Media. But when comparing it to its historical volatility, Teradyne is 1.83 times less risky than Here Media. It trades about 0.02 of its potential returns per unit of risk. Here Media is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 0.01 in Here Media on November 19, 2024 and sell it today you would earn a total of 0.01 from holding Here Media or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Teradyne vs. Here Media
Performance |
| Timeline |
| Teradyne |
| Here Media |
Teradyne and Here Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teradyne and Here Media
The main advantage of trading using opposite Teradyne and Here Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teradyne position performs unexpectedly, Here Media 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 Here Media will offset losses from the drop in Here Media's long position.| Teradyne vs. IPG Photonics | Teradyne vs. Ultra Clean Holdings | Teradyne vs. Onto Innovation | Teradyne vs. Cohu Inc |
| Here Media vs. Willamette Valley Vineyards | Here Media vs. Mills Music Trust | Here Media vs. Fomento Economico Mexicano | Here Media vs. Bridgford Foods |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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