Correlation Between CNH Industrial and Celebrus Technologies
Can any of the company-specific risk be diversified away by investing in both CNH Industrial and Celebrus Technologies 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 CNH Industrial and Celebrus Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CNH Industrial NV and Celebrus Technologies plc, you can compare the effects of market volatilities on CNH Industrial and Celebrus Technologies 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 CNH Industrial with a short position of Celebrus Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNH Industrial and Celebrus Technologies.
Diversification Opportunities for CNH Industrial and Celebrus Technologies
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CNH and Celebrus is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding CNH Industrial NV and Celebrus Technologies plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Celebrus Technologies plc and CNH Industrial 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 CNH Industrial NV are associated (or correlated) with Celebrus Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Celebrus Technologies plc has no effect on the direction of CNH Industrial i.e., CNH Industrial and Celebrus Technologies go up and down completely randomly.
Pair Corralation between CNH Industrial and Celebrus Technologies
Assuming the 90 days trading horizon CNH Industrial NV is expected to generate 2.26 times more return on investment than Celebrus Technologies. However, CNH Industrial is 2.26 times more volatile than Celebrus Technologies plc. It trades about 0.11 of its potential returns per unit of risk. Celebrus Technologies plc is currently generating about -0.07 per unit of risk. If you would invest 1,055 in CNH Industrial NV on September 12, 2024 and sell it today you would earn a total of 90.00 from holding CNH Industrial NV or generate 8.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNH Industrial NV vs. Celebrus Technologies plc
Performance |
| Timeline |
| CNH Industrial NV |
| Celebrus Technologies plc |
CNH Industrial and Celebrus Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNH Industrial and Celebrus Technologies
The main advantage of trading using opposite CNH Industrial and Celebrus Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNH Industrial position performs unexpectedly, Celebrus Technologies 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 Celebrus Technologies will offset losses from the drop in Celebrus Technologies' long position.| CNH Industrial vs. Hong Kong Land | CNH Industrial vs. Neometals | CNH Industrial vs. Coor Service Management | CNH Industrial vs. Fidelity Sustainable USD |
| Celebrus Technologies vs. Microlise Group PLC | Celebrus Technologies vs. Spectra Systems Corp | Celebrus Technologies vs. Neometals | Celebrus Technologies vs. Coor Service Management |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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