Correlation Between Terex and Gencor Industries
Can any of the company-specific risk be diversified away by investing in both Terex and Gencor Industries 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 Terex and Gencor Industries into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Terex and Gencor Industries, you can compare the effects of market volatilities on Terex and Gencor Industries 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 Terex with a short position of Gencor Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Terex and Gencor Industries.
Diversification Opportunities for Terex and Gencor Industries
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Terex and Gencor is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Terex and Gencor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gencor Industries and Terex 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 Terex are associated (or correlated) with Gencor Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gencor Industries has no effect on the direction of Terex i.e., Terex and Gencor Industries go up and down completely randomly.
Pair Corralation between Terex and Gencor Industries
Considering the 90-day investment horizon Terex is expected to generate 5.71 times less return on investment than Gencor Industries. In addition to that, Terex is 1.31 times more volatile than Gencor Industries. It trades about 0.02 of its total potential returns per unit of risk. Gencor Industries is currently generating about 0.15 per unit of volatility. If you would invest 1,999 in Gencor Industries on August 24, 2024 and sell it today you would earn a total of 162.00 from holding Gencor Industries or generate 8.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Terex vs. Gencor Industries
Performance |
| Timeline |
| Terex |
| Gencor Industries |
Terex and Gencor Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Terex and Gencor Industries
The main advantage of trading using opposite Terex and Gencor Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Terex position performs unexpectedly, Gencor Industries 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 Gencor Industries will offset losses from the drop in Gencor Industries' long position.| Terex vs. Oshkosh | Terex vs. Astec Industries | Terex vs. Hyster Yale Materials Handling | Terex vs. Manitex International |
| Gencor Industries vs. Alamo Group | Gencor Industries vs. Manitowoc | Gencor Industries vs. Manitex International | Gencor Industries vs. Columbus McKinnon |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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