Correlation Between Nikola Corp and Terex
Can any of the company-specific risk be diversified away by investing in both Nikola Corp 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 Nikola Corp and Terex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nikola Corp and Terex, you can compare the effects of market volatilities on Nikola Corp 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 Nikola Corp with a short position of Terex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nikola Corp and Terex.
Diversification Opportunities for Nikola Corp and Terex
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nikola and Terex is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Nikola Corp and Terex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terex and Nikola Corp 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 Nikola Corp 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 Nikola Corp i.e., Nikola Corp and Terex go up and down completely randomly.
Pair Corralation between Nikola Corp and Terex
Given the investment horizon of 90 days Nikola Corp is expected to under-perform the Terex. In addition to that, Nikola Corp is 2.71 times more volatile than Terex. It trades about -0.16 of its total potential returns per unit of risk. Terex is currently generating about -0.03 per unit of volatility. If you would invest 6,326 in Terex on November 3, 2024 and sell it today you would lose (1,517) from holding Terex or give up 23.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nikola Corp vs. Terex
Performance |
| Timeline |
| Nikola Corp |
| Terex |
Nikola Corp and Terex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nikola Corp and Terex
The main advantage of trading using opposite Nikola Corp and Terex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nikola Corp 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.| Nikola Corp vs. Xos Inc | Nikola Corp vs. Hydrofarm Holdings Group | Nikola Corp vs. Caterpillar | Nikola Corp vs. AGCO Corporation |
| 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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