Correlation Between SERI INDUSTRIAL and Terex
Can any of the company-specific risk be diversified away by investing in both SERI INDUSTRIAL 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 SERI INDUSTRIAL and Terex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SERI INDUSTRIAL EO and Terex, you can compare the effects of market volatilities on SERI INDUSTRIAL 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 SERI INDUSTRIAL with a short position of Terex. Check out your portfolio center. Please also check ongoing floating volatility patterns of SERI INDUSTRIAL and Terex.
Diversification Opportunities for SERI INDUSTRIAL and Terex
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SERI and Terex is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding SERI INDUSTRIAL EO and Terex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terex and SERI INDUSTRIAL 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 SERI INDUSTRIAL EO 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 SERI INDUSTRIAL i.e., SERI INDUSTRIAL and Terex go up and down completely randomly.
Pair Corralation between SERI INDUSTRIAL and Terex
Assuming the 90 days trading horizon SERI INDUSTRIAL is expected to generate 2.13 times less return on investment than Terex. In addition to that, SERI INDUSTRIAL is 2.36 times more volatile than Terex. It trades about 0.04 of its total potential returns per unit of risk. Terex is currently generating about 0.21 per unit of volatility. If you would invest 4,657 in Terex on September 3, 2024 and sell it today you would earn a total of 487.00 from holding Terex or generate 10.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SERI INDUSTRIAL EO vs. Terex
Performance |
| Timeline |
| SERI INDUSTRIAL EO |
| Terex |
SERI INDUSTRIAL and Terex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SERI INDUSTRIAL and Terex
The main advantage of trading using opposite SERI INDUSTRIAL and Terex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SERI INDUSTRIAL 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.| SERI INDUSTRIAL vs. Apple Inc | SERI INDUSTRIAL vs. Apple Inc | SERI INDUSTRIAL vs. Apple Inc | SERI INDUSTRIAL vs. Apple Inc |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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