Correlation Between Teradyne and One Group
Can any of the company-specific risk be diversified away by investing in both Teradyne and One Group 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 One Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teradyne and One Group Hospitality, you can compare the effects of market volatilities on Teradyne and One Group 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 One Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teradyne and One Group.
Diversification Opportunities for Teradyne and One Group
Very good diversification
The 3 months correlation between Teradyne and One is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Teradyne and One Group Hospitality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on One Group Hospitality 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 One Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of One Group Hospitality has no effect on the direction of Teradyne i.e., Teradyne and One Group go up and down completely randomly.
Pair Corralation between Teradyne and One Group
Considering the 90-day investment horizon Teradyne is expected to generate 5.61 times less return on investment than One Group. But when comparing it to its historical volatility, Teradyne is 1.38 times less risky than One Group. It trades about 0.08 of its potential returns per unit of risk. One Group Hospitality is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 286.00 in One Group Hospitality on October 23, 2024 and sell it today you would earn a total of 59.00 from holding One Group Hospitality or generate 20.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teradyne vs. One Group Hospitality
Performance |
| Timeline |
| Teradyne |
| One Group Hospitality |
Teradyne and One Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teradyne and One Group
The main advantage of trading using opposite Teradyne and One Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teradyne position performs unexpectedly, One Group 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 One Group will offset losses from the drop in One Group's long position.| Teradyne vs. IPG Photonics | Teradyne vs. Ultra Clean Holdings | Teradyne vs. Onto Innovation | Teradyne vs. Cohu Inc |
| One Group vs. FAT Brands | One Group vs. Potbelly Co | One Group vs. BJs Restaurants | One Group vs. Rave Restaurant Group |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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