Correlation Between Teradyne and Acm Research

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

By analyzing existing cross correlation between Teradyne and Acm Research, you can compare the effects of market volatilities on Teradyne and Acm Research 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 Acm Research. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teradyne and Acm Research.

Diversification Opportunities for Teradyne and Acm Research

0.91

Correlation Coefficient

Teradyne  Acm Research

Almost no diversification

The 3 months correlation between Teradyne and Acm is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Teradyne and Acm Research in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acm Research 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 Acm Research. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acm Research has no effect on the direction of Teradyne i.e., Teradyne and Acm Research go up and down completely randomly.

Pair Corralation between Teradyne and Acm Research

Considering the 90-day investment horizon Teradyne is expected to generate 1.23 times less return on investment than Acm Research. In addition to that, Teradyne is 1.02 times more volatile than Acm Research. It trades about 0.19 of its total potential returns per unit of risk. Acm Research is currently generating about 0.23 per unit of volatility. If you would invest  2,003  in Acm Research on May 7, 2025 and sell it today you would earn a total of  1,071  from holding Acm Research or generate 53.47% return on investment over 90 days.

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

Teradyne  vs.  Acm Research

Teradyne

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Teradyne are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Teradyne reported solid returns over the last few months and may actually be approaching a breakup point.

Acm Research

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Acm Research are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain primary indicators, Acm Research reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Teradyne and Acm Research

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

The idea behind Teradyne and Acm Research 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.