Correlation Between Teradyne and Wisekey International
Can any of the company-specific risk be diversified away by investing in both Teradyne and Wisekey International 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 Wisekey International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teradyne and Wisekey International Holding, you can compare the effects of market volatilities on Teradyne and Wisekey International 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 Wisekey International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teradyne and Wisekey International.
Diversification Opportunities for Teradyne and Wisekey International
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Teradyne and Wisekey is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Teradyne and Wisekey International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wisekey 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 Wisekey International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wisekey International has no effect on the direction of Teradyne i.e., Teradyne and Wisekey International go up and down completely randomly.
Pair Corralation between Teradyne and Wisekey International
Considering the 90-day investment horizon Teradyne is expected to under-perform the Wisekey International. But the stock apears to be less risky and, when comparing its historical volatility, Teradyne is 5.07 times less risky than Wisekey International. The stock trades about -0.03 of its potential returns per unit of risk. The Wisekey International Holding is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 208.00 in Wisekey International Holding on September 21, 2024 and sell it today you would earn a total of 569.00 from holding Wisekey International Holding or generate 273.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teradyne vs. Wisekey International Holding
Performance |
| Timeline |
| Teradyne |
| Wisekey International |
Teradyne and Wisekey International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teradyne and Wisekey International
The main advantage of trading using opposite Teradyne and Wisekey International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teradyne position performs unexpectedly, Wisekey International 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 Wisekey International will offset losses from the drop in Wisekey International's long position.The idea behind Teradyne and Wisekey International Holding pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Wisekey International vs. OppFi Inc | Wisekey International vs. CS Disco LLC | Wisekey International vs. ON24 Inc | Wisekey International vs. Amplitude |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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