Correlation Between ChinaCache International and Teradata Corp

Can any of the company-specific risk be diversified away by investing in both ChinaCache International and Teradata Corp 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 ChinaCache International and Teradata Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ChinaCache International Holdings and Teradata Corp, you can compare the effects of market volatilities on ChinaCache International and Teradata Corp 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 ChinaCache International with a short position of Teradata Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of ChinaCache International and Teradata Corp.

Diversification Opportunities for ChinaCache International and Teradata Corp

0.0

Correlation Coefficient

ChinaCache International  Teradata Corp

Pay attention - limited upside

The 3 months correlation between ChinaCache and Teradata is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ChinaCache International Holdi and Teradata Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teradata Corp and ChinaCache International 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 ChinaCache International Holdings are associated (or correlated) with Teradata Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teradata Corp has no effect on the direction of ChinaCache International i.e., ChinaCache International and Teradata Corp go up and down completely randomly.

Pair Corralation between ChinaCache International and Teradata Corp

If you would invest (100.00) in ChinaCache International Holdings on January 30, 2024 and sell it today you would earn a total of  100.00  from holding ChinaCache International Holdings or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ChinaCache International Holdi  vs.  Teradata Corp

ChinaCache International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ChinaCache International Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, ChinaCache International is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Teradata Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Teradata Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with ChinaCache International and Teradata Corp

The main advantage of trading using opposite ChinaCache International and Teradata Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChinaCache International position performs unexpectedly, Teradata Corp 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 Teradata Corp will offset losses from the drop in Teradata Corp's long position.

The idea behind ChinaCache International Holdings and Teradata Corp 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.

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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.