Correlation Between Terex and EXCO Resources
Can any of the company-specific risk be diversified away by investing in both Terex and EXCO Resources 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 EXCO Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Terex and EXCO Resources, you can compare the effects of market volatilities on Terex and EXCO Resources 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 EXCO Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Terex and EXCO Resources.
Diversification Opportunities for Terex and EXCO Resources
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Terex and EXCO is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Terex and EXCO Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EXCO Resources 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 EXCO Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EXCO Resources has no effect on the direction of Terex i.e., Terex and EXCO Resources go up and down completely randomly.
Pair Corralation between Terex and EXCO Resources
If you would invest 0.00 in EXCO Resources on January 24, 2024 and sell it today you would earn a total of 0.00 from holding EXCO Resources or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 5.0% |
| Values | Daily Returns |
Terex vs. EXCO Resources
Performance |
| Timeline |
| Terex |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Insignificant
| EXCO Resources |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Terex and EXCO Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Terex and EXCO Resources
The main advantage of trading using opposite Terex and EXCO Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Terex position performs unexpectedly, EXCO Resources 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 EXCO Resources will offset losses from the drop in EXCO Resources' long position.| Terex vs. Astec Industries | Terex vs. Hyster Yale Materials Handling | Terex vs. Manitex International | Terex vs. Manitowoc |
| EXCO Resources vs. PepsiCo | EXCO Resources vs. Celsius Holdings | EXCO Resources vs. Primo Water Corp | EXCO Resources vs. Oatly Group AB |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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