Correlation Between Weir Group and Dexterra

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

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

Diversification Opportunities for Weir Group and Dexterra

0.9

Correlation Coefficient

Weir Group  Dexterra

Almost no diversification

The 3 months correlation between Weir and Dexterra is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Weir Group PLC and Dexterra Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dexterra Group and Weir Group 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 Weir Group PLC are associated (or correlated) with Dexterra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dexterra Group has no effect on the direction of Weir Group i.e., Weir Group and Dexterra go up and down completely randomly.

Pair Corralation between Weir Group and Dexterra

Assuming the 90 days horizon Weir Group PLC is expected to generate 1.2 times more return on investment than Dexterra. However, Weir Group is 1.2 times more volatile than Dexterra Group. It trades about 0.16 of its potential returns per unit of risk. Dexterra Group is currently generating about 0.17 per unit of risk. If you would invest  1,544  in Weir Group PLC on May 5, 2025 and sell it today you would earn a total of  227.00  from holding Weir Group PLC or generate 14.7% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.44%
Values	Daily Returns

Weir Group PLC  vs.  Dexterra Group

Weir Group PLC

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Weir Group PLC are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Weir Group showed solid returns over the last few months and may actually be approaching a breakup point.

Dexterra Group

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Dexterra Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Dexterra reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Weir Group and Dexterra

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

The idea behind Weir Group PLC and Dexterra Group 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 Global Correlations module to find global opportunities by holding instruments from different markets.