Correlation Between Teradyne and Pinterest
Can any of the company-specific risk be diversified away by investing in both Teradyne and Pinterest 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 Pinterest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teradyne and Pinterest, you can compare the effects of market volatilities on Teradyne and Pinterest 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 Pinterest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teradyne and Pinterest.
Diversification Opportunities for Teradyne and Pinterest
Very weak diversification
The 3 months correlation between Teradyne and Pinterest is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Teradyne and Pinterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinterest 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 Pinterest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinterest has no effect on the direction of Teradyne i.e., Teradyne and Pinterest go up and down completely randomly.
Pair Corralation between Teradyne and Pinterest
Considering the 90-day investment horizon Teradyne is expected to under-perform the Pinterest. But the stock apears to be less risky and, when comparing its historical volatility, Teradyne is 1.05 times less risky than Pinterest. The stock trades about 0.0 of its potential returns per unit of risk. The Pinterest is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,727 in Pinterest on January 16, 2025 and sell it today you would lose (128.00) from holding Pinterest or give up 4.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teradyne vs. Pinterest
Performance |
| Timeline |
| Teradyne |
Teradyne and Pinterest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teradyne and Pinterest
The main advantage of trading using opposite Teradyne and Pinterest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teradyne position performs unexpectedly, Pinterest 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 Pinterest will offset losses from the drop in Pinterest's long position.| Teradyne vs. IPG Photonics | Teradyne vs. Ultra Clean Holdings | Teradyne vs. Onto Innovation | Teradyne vs. Cohu Inc |
| Pinterest vs. Twilio Inc | Pinterest vs. Meta Platforms | Pinterest vs. Alphabet Inc Class C | Pinterest vs. Alphabet Inc Class A |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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