Correlation Between Teledyne Technologies and Autoscope Technologies

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

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

Diversification Opportunities for Teledyne Technologies and Autoscope Technologies

-0.52

Correlation Coefficient

Teledyne Technologies  Autoscope Technologies

Excellent diversification

The 3 months correlation between Teledyne and Autoscope is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Teledyne Technologies Incorpor and Autoscope Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autoscope Technologies and Teledyne Technologies 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 Teledyne Technologies Incorporated are associated (or correlated) with Autoscope Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autoscope Technologies has no effect on the direction of Teledyne Technologies i.e., Teledyne Technologies and Autoscope Technologies go up and down completely randomly.

Pair Corralation between Teledyne Technologies and Autoscope Technologies

If you would invest  42,775  in Teledyne Technologies Incorporated on September 13, 2024 and sell it today you would earn a total of  4,327  from holding Teledyne Technologies Incorporated or generate 10.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Teledyne Technologies Incorpor  vs.  Autoscope Technologies Corp

Teledyne Technologies

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Teledyne Technologies Incorporated are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain fundamental indicators, Teledyne Technologies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Autoscope Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Teledyne Technologies and Autoscope Technologies

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

The idea behind Teledyne Technologies Incorporated and Autoscope Technologies 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.