Correlation Between Teradyne and Trio Tech
Can any of the company-specific risk be diversified away by investing in both Teradyne and Trio Tech 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 Trio Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teradyne and Trio Tech International, you can compare the effects of market volatilities on Teradyne and Trio Tech 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 Trio Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teradyne and Trio Tech.
Diversification Opportunities for Teradyne and Trio Tech
Excellent diversification
The 3 months correlation between Teradyne and Trio is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Teradyne and Trio Tech International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trio Tech International 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 Trio Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trio Tech International has no effect on the direction of Teradyne i.e., Teradyne and Trio Tech go up and down completely randomly.
Pair Corralation between Teradyne and Trio Tech
Considering the 90-day investment horizon Teradyne is expected to under-perform the Trio Tech. But the stock apears to be less risky and, when comparing its historical volatility, Teradyne is 1.3 times less risky than Trio Tech. The stock trades about -0.1 of its potential returns per unit of risk. The Trio Tech International is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 604.00 in Trio Tech International on November 28, 2024 and sell it today you would earn a total of 16.00 from holding Trio Tech International or generate 2.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teradyne vs. Trio Tech International
Performance |
| Timeline |
| Teradyne |
| Trio Tech International |
Teradyne and Trio Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teradyne and Trio Tech
The main advantage of trading using opposite Teradyne and Trio Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teradyne position performs unexpectedly, Trio Tech 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 Trio Tech will offset losses from the drop in Trio Tech's long position.| Teradyne vs. IPG Photonics | Teradyne vs. Ultra Clean Holdings | Teradyne vs. Onto Innovation | Teradyne vs. Cohu Inc |
| Trio Tech vs. Aehr Test Systems | Trio Tech vs. Camtek | Trio Tech vs. Nova | Trio Tech vs. Axcelis Technologies |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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