Correlation Between Hino Motors and Terex
Can any of the company-specific risk be diversified away by investing in both Hino Motors 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 Hino Motors and Terex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hino Motors Ltd and Terex, you can compare the effects of market volatilities on Hino Motors 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 Hino Motors with a short position of Terex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hino Motors and Terex.
Diversification Opportunities for Hino Motors and Terex
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hino and Terex is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Hino Motors Ltd and Terex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terex and Hino Motors 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 Hino Motors Ltd 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 Hino Motors i.e., Hino Motors and Terex go up and down completely randomly.
Pair Corralation between Hino Motors and Terex
Assuming the 90 days horizon Hino Motors Ltd is expected to under-perform the Terex. But the pink sheet apears to be less risky and, when comparing its historical volatility, Hino Motors Ltd is 1.17 times less risky than Terex. The pink sheet trades about -0.03 of its potential returns per unit of risk. The Terex is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 4,195 in Terex on November 28, 2024 and sell it today you would earn a total of 39.00 from holding Terex or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Hino Motors Ltd vs. Terex
Performance |
| Timeline |
| Hino Motors |
| Terex |
Hino Motors and Terex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hino Motors and Terex
The main advantage of trading using opposite Hino Motors and Terex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hino Motors 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.| Hino Motors vs. Daimler Truck Holding | Hino Motors vs. Volvo AB ADR | Hino Motors vs. Columbus McKinnon | Hino Motors vs. Hyster Yale Materials Handling |
| 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |