Correlation Between Informatica and Teradata Corp

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

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

Diversification Opportunities for Informatica and Teradata Corp

-0.21

Correlation Coefficient

Informatica  Teradata Corp

Very good diversification

The 3 months correlation between Informatica and Teradata is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Informatica and Teradata Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teradata Corp and Informatica 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 Informatica 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 Informatica i.e., Informatica and Teradata Corp go up and down completely randomly.

Pair Corralation between Informatica and Teradata Corp

Given the investment horizon of 90 days Informatica is expected to generate 0.15 times more return on investment than Teradata Corp. However, Informatica is 6.61 times less risky than Teradata Corp. It trades about 0.17 of its potential returns per unit of risk. Teradata Corp is currently generating about -0.01 per unit of risk. If you would invest  2,392  in Informatica on May 26, 2025 and sell it today you would earn a total of  82.00  from holding Informatica or generate 3.43% return on investment over 90 days.

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

Informatica  vs.  Teradata Corp

Informatica

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Informatica are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Informatica is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Teradata Corp

Risk-Adjusted Performance

Weakest

Over the last 90 days Teradata Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Teradata Corp is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Informatica and Teradata Corp

The main advantage of trading using opposite Informatica and Teradata Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Informatica 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 Informatica 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.