Correlation Between Teradyne and Sphere Entertainment
Can any of the company-specific risk be diversified away by investing in both Teradyne and Sphere Entertainment 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 Sphere Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teradyne and Sphere Entertainment Co, you can compare the effects of market volatilities on Teradyne and Sphere Entertainment 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 Sphere Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teradyne and Sphere Entertainment.
Diversification Opportunities for Teradyne and Sphere Entertainment
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Teradyne and Sphere is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Teradyne and Sphere Entertainment Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sphere Entertainment 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 Sphere Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sphere Entertainment has no effect on the direction of Teradyne i.e., Teradyne and Sphere Entertainment go up and down completely randomly.
Pair Corralation between Teradyne and Sphere Entertainment
Considering the 90-day investment horizon Teradyne is expected to generate 1.26 times less return on investment than Sphere Entertainment. But when comparing it to its historical volatility, Teradyne is 1.1 times less risky than Sphere Entertainment. It trades about 0.04 of its potential returns per unit of risk. Sphere Entertainment Co is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,362 in Sphere Entertainment Co on August 29, 2024 and sell it today you would earn a total of 742.00 from holding Sphere Entertainment Co or generate 22.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teradyne vs. Sphere Entertainment Co
Performance |
| Timeline |
| Teradyne |
| Sphere Entertainment |
Teradyne and Sphere Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teradyne and Sphere Entertainment
The main advantage of trading using opposite Teradyne and Sphere Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teradyne position performs unexpectedly, Sphere Entertainment 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 Sphere Entertainment will offset losses from the drop in Sphere Entertainment's long position.| Teradyne vs. IPG Photonics | Teradyne vs. Ultra Clean Holdings | Teradyne vs. Onto Innovation | Teradyne vs. Cohu Inc |
| Sphere Entertainment vs. MagnaChip Semiconductor | Sphere Entertainment vs. Taiwan Semiconductor Manufacturing | Sphere Entertainment vs. Vishay Intertechnology | Sphere Entertainment vs. Ryanair Holdings PLC |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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