Correlation Between Teradyne and KRISPY KREME
Can any of the company-specific risk be diversified away by investing in both Teradyne and KRISPY KREME 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 KRISPY KREME into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teradyne and KRISPY KREME DL 01, you can compare the effects of market volatilities on Teradyne and KRISPY KREME 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 KRISPY KREME. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teradyne and KRISPY KREME.
Diversification Opportunities for Teradyne and KRISPY KREME
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Teradyne and KRISPY is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Teradyne and KRISPY KREME DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KRISPY KREME DL 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 KRISPY KREME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KRISPY KREME DL has no effect on the direction of Teradyne i.e., Teradyne and KRISPY KREME go up and down completely randomly.
Pair Corralation between Teradyne and KRISPY KREME
Assuming the 90 days horizon Teradyne is expected to generate 0.65 times more return on investment than KRISPY KREME. However, Teradyne is 1.54 times less risky than KRISPY KREME. It trades about 0.06 of its potential returns per unit of risk. KRISPY KREME DL 01 is currently generating about 0.0 per unit of risk. If you would invest 10,160 in Teradyne on August 29, 2024 and sell it today you would earn a total of 272.00 from holding Teradyne or generate 2.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Teradyne vs. KRISPY KREME DL 01
Performance |
| Timeline |
| Teradyne |
| KRISPY KREME DL |
Teradyne and KRISPY KREME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teradyne and KRISPY KREME
The main advantage of trading using opposite Teradyne and KRISPY KREME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teradyne position performs unexpectedly, KRISPY KREME 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 KRISPY KREME will offset losses from the drop in KRISPY KREME's long position.| Teradyne vs. Eidesvik Offshore ASA | Teradyne vs. UPDATE SOFTWARE | Teradyne vs. EIDESVIK OFFSHORE NK | Teradyne vs. Virtus Investment Partners |
| KRISPY KREME vs. TOREX SEMICONDUCTOR LTD | KRISPY KREME vs. CARSALESCOM | KRISPY KREME vs. Magnachip Semiconductor | KRISPY KREME vs. Tradeweb Markets |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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