Correlation Between Exponent and Tutor Perini

Can any of the company-specific risk be diversified away by investing in both Exponent and Tutor Perini 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 Exponent and Tutor Perini into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Exponent and Tutor Perini, you can compare the effects of market volatilities on Exponent and Tutor Perini 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 Exponent with a short position of Tutor Perini. Check out your portfolio center. Please also check ongoing floating volatility patterns of Exponent and Tutor Perini.

Diversification Opportunities for Exponent and Tutor Perini

-0.6

Correlation Coefficient

Exponent  Tutor Perini

Excellent diversification

The 3 months correlation between Exponent and Tutor is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Exponent and Tutor Perini in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tutor Perini and Exponent 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 Exponent are associated (or correlated) with Tutor Perini. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tutor Perini has no effect on the direction of Exponent i.e., Exponent and Tutor Perini go up and down completely randomly.

Pair Corralation between Exponent and Tutor Perini

Given the investment horizon of 90 days Exponent is expected to under-perform the Tutor Perini. But the stock apears to be less risky and, when comparing its historical volatility, Exponent is 2.49 times less risky than Tutor Perini. The stock trades about -0.09 of its potential returns per unit of risk. The Tutor Perini is currently generating about 0.33 of returns per unit of risk over similar time horizon. If you would invest  2,202  in Tutor Perini on May 1, 2025 and sell it today you would earn a total of  2,489  from holding Tutor Perini or generate 113.03% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Exponent  vs.  Tutor Perini

Exponent

Risk-Adjusted Performance

Very Weak

Over the last 90 days Exponent has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Tutor Perini

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Tutor Perini are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Tutor Perini exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Exponent and Tutor Perini

The main advantage of trading using opposite Exponent and Tutor Perini positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Exponent position performs unexpectedly, Tutor Perini 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 Tutor Perini will offset losses from the drop in Tutor Perini's long position.

The idea behind Exponent and Tutor Perini 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.