Correlation Between Teradata Corp and Unisys

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

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

Diversification Opportunities for Teradata Corp and Unisys

0.68

Correlation Coefficient

Teradata Corp  Unisys

Poor diversification

The 3 months correlation between Teradata and Unisys is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Teradata Corp and Unisys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Unisys and Teradata Corp 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 Teradata Corp are associated (or correlated) with Unisys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Unisys has no effect on the direction of Teradata Corp i.e., Teradata Corp and Unisys go up and down completely randomly.

Pair Corralation between Teradata Corp and Unisys

Considering the 90-day investment horizon Teradata Corp is expected to under-perform the Unisys. But the stock apears to be less risky and, when comparing its historical volatility, Teradata Corp is 2.17 times less risky than Unisys. The stock trades about 0.0 of its potential returns per unit of risk. The Unisys is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  498.00  in Unisys on January 24, 2024 and sell it today you would earn a total of  50.00  from holding Unisys or generate 10.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Teradata Corp  vs.  Unisys

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 weak 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.

Unisys

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Unisys has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's forward indicators remain comparatively stable which may send shares a bit higher in May 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Teradata Corp and Unisys

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

The idea behind Teradata Corp and Unisys 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.