Correlation Between Oshkosh and Terex
Can any of the company-specific risk be diversified away by investing in both Oshkosh 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 Oshkosh and Terex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Oshkosh and Terex, you can compare the effects of market volatilities on Oshkosh 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 Oshkosh with a short position of Terex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Oshkosh and Terex.
Diversification Opportunities for Oshkosh and Terex
Almost no diversification
The 3 months correlation between Oshkosh and Terex is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Oshkosh and Terex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terex and Oshkosh 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 Oshkosh 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 Oshkosh i.e., Oshkosh and Terex go up and down completely randomly.
Pair Corralation between Oshkosh and Terex
Considering the 90-day investment horizon Oshkosh is expected to generate 1.21 times more return on investment than Terex. However, Oshkosh is 1.21 times more volatile than Terex. It trades about 0.07 of its potential returns per unit of risk. Terex is currently generating about -0.02 per unit of risk. If you would invest 10,276 in Oshkosh on November 1, 2024 and sell it today you would earn a total of 1,050 from holding Oshkosh or generate 10.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Oshkosh vs. Terex
Performance |
| Timeline |
| Oshkosh |
| Terex |
Oshkosh and Terex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Oshkosh and Terex
The main advantage of trading using opposite Oshkosh and Terex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Oshkosh 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.| Oshkosh vs. Terex | Oshkosh vs. Astec Industries | Oshkosh vs. Hyster Yale Materials Handling | Oshkosh vs. Manitowoc |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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