Correlation Between CNH Industrial and Hong Kong
Can any of the company-specific risk be diversified away by investing in both CNH Industrial and Hong Kong 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 Hong Kong 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 Hong Kong Land, you can compare the effects of market volatilities on CNH Industrial and Hong Kong 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 Hong Kong. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNH Industrial and Hong Kong.
Diversification Opportunities for CNH Industrial and Hong Kong
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CNH and Hong is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CNH Industrial NV and Hong Kong Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Kong Land 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 Hong Kong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hong Kong Land has no effect on the direction of CNH Industrial i.e., CNH Industrial and Hong Kong go up and down completely randomly.
Pair Corralation between CNH Industrial and Hong Kong
If you would invest 1,055 in CNH Industrial NV on September 13, 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 | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNH Industrial NV vs. Hong Kong Land
Performance |
| Timeline |
| CNH Industrial NV |
| Hong Kong Land |
CNH Industrial and Hong Kong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNH Industrial and Hong Kong
The main advantage of trading using opposite CNH Industrial and Hong Kong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNH Industrial position performs unexpectedly, Hong Kong 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 Hong Kong will offset losses from the drop in Hong Kong's long position.| CNH Industrial vs. JB Hunt Transport | CNH Industrial vs. Batm Advanced Communications | CNH Industrial vs. Thor Mining PLC | CNH Industrial vs. Hochschild Mining plc |
| Hong Kong vs. Jacquet Metal Service | Hong Kong vs. Wyndham Hotels Resorts | Hong Kong vs. InterContinental Hotels Group | Hong Kong vs. AMG Advanced Metallurgical |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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