Correlation Between CNH Industrial and Sany Heavy
Can any of the company-specific risk be diversified away by investing in both CNH Industrial and Sany Heavy 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 Sany Heavy 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 Sany Heavy Equipment, you can compare the effects of market volatilities on CNH Industrial and Sany Heavy 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 Sany Heavy. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNH Industrial and Sany Heavy.
Diversification Opportunities for CNH Industrial and Sany Heavy
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CNH and Sany is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding CNH Industrial NV and Sany Heavy Equipment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sany Heavy Equipment 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 Sany Heavy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sany Heavy Equipment has no effect on the direction of CNH Industrial i.e., CNH Industrial and Sany Heavy go up and down completely randomly.
Pair Corralation between CNH Industrial and Sany Heavy
Assuming the 90 days horizon CNH Industrial NV is expected to under-perform the Sany Heavy. But the stock apears to be less risky and, when comparing its historical volatility, CNH Industrial NV is 1.59 times less risky than Sany Heavy. The stock trades about 0.0 of its potential returns per unit of risk. The Sany Heavy Equipment is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 57.00 in Sany Heavy Equipment on September 3, 2024 and sell it today you would earn a total of 1.00 from holding Sany Heavy Equipment or generate 1.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNH Industrial NV vs. Sany Heavy Equipment
Performance |
| Timeline |
| CNH Industrial NV |
| Sany Heavy Equipment |
CNH Industrial and Sany Heavy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNH Industrial and Sany Heavy
The main advantage of trading using opposite CNH Industrial and Sany Heavy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNH Industrial position performs unexpectedly, Sany Heavy 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 Sany Heavy will offset losses from the drop in Sany Heavy's long position.| CNH Industrial vs. SERI INDUSTRIAL EO | CNH Industrial vs. MAROC TELECOM | CNH Industrial vs. SK TELECOM TDADR | CNH Industrial vs. Ribbon Communications |
| Sany Heavy vs. United Rentals | Sany Heavy vs. SHIP HEALTHCARE HLDGINC | Sany Heavy vs. Air Lease | Sany Heavy vs. DXC Technology Co |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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