Correlation Between Teradyne and ProShares Ultra
Can any of the company-specific risk be diversified away by investing in both Teradyne and ProShares Ultra 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 ProShares Ultra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teradyne and ProShares Ultra Bloomberg, you can compare the effects of market volatilities on Teradyne and ProShares Ultra 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 ProShares Ultra. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teradyne and ProShares Ultra.
Diversification Opportunities for Teradyne and ProShares Ultra
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Teradyne and ProShares is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Teradyne and ProShares Ultra Bloomberg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProShares Ultra Bloomberg 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 ProShares Ultra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProShares Ultra Bloomberg has no effect on the direction of Teradyne i.e., Teradyne and ProShares Ultra go up and down completely randomly.
Pair Corralation between Teradyne and ProShares Ultra
Considering the 90-day investment horizon Teradyne is expected to generate 0.33 times more return on investment than ProShares Ultra. However, Teradyne is 3.01 times less risky than ProShares Ultra. It trades about 0.05 of its potential returns per unit of risk. ProShares Ultra Bloomberg is currently generating about -0.14 per unit of risk. If you would invest 10,043 in Teradyne on December 29, 2023 and sell it today you would earn a total of 1,222 from holding Teradyne or generate 12.17% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Teradyne vs. ProShares Ultra Bloomberg
Performance |
Timeline |
Teradyne |
ProShares Ultra Bloomberg |
Teradyne and ProShares Ultra Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Teradyne and ProShares Ultra
The main advantage of trading using opposite Teradyne and ProShares Ultra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teradyne position performs unexpectedly, ProShares Ultra 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 ProShares Ultra will offset losses from the drop in ProShares Ultra's long position.Teradyne vs. VirnetX Holding Corp | Teradyne vs. Asure Software | Teradyne vs. Burlington Stores | Teradyne vs. Duluth Holdings |
ProShares Ultra vs. Drum Income Plus | ProShares Ultra vs. EA Series Trust | ProShares Ultra vs. Global X MLP | ProShares Ultra vs. ETRACS Quarterly Pay |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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