Correlation Between Windstream Holdings and Terex

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Can any of the company-specific risk be diversified away by investing in both Windstream Holdings 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 Windstream Holdings and Terex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Windstream Holdings and Terex, you can compare the effects of market volatilities on Windstream Holdings 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 Windstream Holdings with a short position of Terex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Windstream Holdings and Terex.

Diversification Opportunities for Windstream Holdings and Terex

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Windstream and Terex is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Windstream Holdings and Terex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terex and Windstream Holdings 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 Windstream Holdings 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 Windstream Holdings i.e., Windstream Holdings and Terex go up and down completely randomly.

Pair Corralation between Windstream Holdings and Terex

If you would invest  3,187  in Terex on December 29, 2023 and sell it today you would earn a total of  3,265  from holding Terex or generate 102.45% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Windstream Holdings  vs.  Terex

 Performance 
       Timeline  
Windstream Holdings 

Risk-Adjusted Performance

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Very Weak
Over the last 90 days Windstream Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Windstream Holdings is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.
Terex 

Risk-Adjusted Performance

7 of 100

 
Low
 
High
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Terex are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady technical and fundamental indicators, Terex showed solid returns over the last few months and may actually be approaching a breakup point.

Windstream Holdings and Terex Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Windstream Holdings and Terex

The main advantage of trading using opposite Windstream Holdings and Terex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Windstream Holdings 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.
The idea behind Windstream Holdings and Terex pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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