Correlation Between Xos and Terex
Can any of the company-specific risk be diversified away by investing in both Xos 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 Xos and Terex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Xos Inc and Terex, you can compare the effects of market volatilities on Xos 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 Xos with a short position of Terex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Xos and Terex.
Diversification Opportunities for Xos and Terex
Average diversification
The 3 months correlation between Xos and Terex is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Xos Inc and Terex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terex and Xos 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 Xos Inc 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 Xos i.e., Xos and Terex go up and down completely randomly.
Pair Corralation between Xos and Terex
Considering the 90-day investment horizon Xos Inc is expected to under-perform the Terex. In addition to that, Xos is 1.75 times more volatile than Terex. It trades about -0.06 of its total potential returns per unit of risk. Terex is currently generating about 0.02 per unit of volatility. If you would invest 5,410 in Terex on August 30, 2024 and sell it today you would earn a total of 17.00 from holding Terex or generate 0.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Xos Inc vs. Terex
Performance |
| Timeline |
| Xos Inc |
| Terex |
Xos and Terex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Xos and Terex
The main advantage of trading using opposite Xos and Terex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Xos 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.| Xos vs. Thayer Ventures Acquisition | Xos vs. Iveda Solutions Warrant | Xos vs. Aquagold International | Xos vs. Morningstar Unconstrained Allocation |
| Terex vs. Oshkosh | Terex vs. Astec Industries | Terex vs. Hyster Yale Materials Handling | Terex vs. Manitex International |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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