Correlation Between Teradyne and Sea
Can any of the company-specific risk be diversified away by investing in both Teradyne and Sea 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 Sea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teradyne and Sea, you can compare the effects of market volatilities on Teradyne and Sea 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 Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teradyne and Sea.
Diversification Opportunities for Teradyne and Sea
Excellent diversification
The 3 months correlation between Teradyne and Sea is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Teradyne and Sea in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sea 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 Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sea has no effect on the direction of Teradyne i.e., Teradyne and Sea go up and down completely randomly.
Pair Corralation between Teradyne and Sea
Considering the 90-day investment horizon Teradyne is expected to under-perform the Sea. In addition to that, Teradyne is 1.32 times more volatile than Sea. It trades about -0.05 of its total potential returns per unit of risk. Sea is currently generating about 0.19 per unit of volatility. If you would invest 6,752 in Sea on August 29, 2024 and sell it today you would earn a total of 4,819 from holding Sea or generate 71.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teradyne vs. Sea
Performance |
| Timeline |
| Teradyne |
| Sea |
Teradyne and Sea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teradyne and Sea
The main advantage of trading using opposite Teradyne and Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teradyne position performs unexpectedly, Sea 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 Sea will offset losses from the drop in Sea'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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules |