Correlation Between CEA Industries and Terex
Can any of the company-specific risk be diversified away by investing in both CEA Industries and Terex 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 CEA Industries and Terex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CEA Industries and Terex, you can compare the effects of market volatilities on CEA Industries and Terex 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 CEA Industries with a short position of Terex. Check out your portfolio center. Please also check ongoing floating volatility patterns of CEA Industries and Terex.
Diversification Opportunities for CEA Industries and Terex
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CEA and Terex is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding CEA Industries and Terex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terex and CEA Industries 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 CEA Industries are associated (or correlated) with Terex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terex has no effect on the direction of CEA Industries i.e., CEA Industries and Terex go up and down completely randomly.
Pair Corralation between CEA Industries and Terex
Given the investment horizon of 90 days CEA Industries is expected to under-perform the Terex. In addition to that, CEA Industries is 1.24 times more volatile than Terex. It trades about -0.08 of its total potential returns per unit of risk. Terex is currently generating about 0.09 per unit of volatility. If you would invest 4,493 in Terex on November 9, 2024 and sell it today you would earn a total of 159.00 from holding Terex or generate 3.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CEA Industries vs. Terex
Performance |
| Timeline |
| CEA Industries |
| Terex |
CEA Industries and Terex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CEA Industries and Terex
The main advantage of trading using opposite CEA Industries and Terex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CEA Industries position performs unexpectedly, Terex 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 Terex will offset losses from the drop in Terex's long position.| CEA Industries vs. Rev Group | CEA Industries vs. Caterpillar | CEA Industries vs. Buhler Industries | CEA Industries vs. Austin Engineering Limited |
| Terex vs. Oshkosh | Terex vs. Astec Industries | Terex vs. Hyster Yale Materials Handling | Terex vs. Manitowoc |
Check out your portfolio center.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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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