Correlation Between CNH Industrial and Jacquet Metal
Can any of the company-specific risk be diversified away by investing in both CNH Industrial and Jacquet Metal 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 Jacquet Metal 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 Jacquet Metal Service, you can compare the effects of market volatilities on CNH Industrial and Jacquet Metal 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 Jacquet Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNH Industrial and Jacquet Metal.
Diversification Opportunities for CNH Industrial and Jacquet Metal
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between CNH and Jacquet is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding CNH Industrial NV and Jacquet Metal Service in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jacquet Metal Service 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 Jacquet Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jacquet Metal Service has no effect on the direction of CNH Industrial i.e., CNH Industrial and Jacquet Metal go up and down completely randomly.
Pair Corralation between CNH Industrial and Jacquet Metal
Assuming the 90 days trading horizon CNH Industrial NV is expected to generate 1.37 times more return on investment than Jacquet Metal. However, CNH Industrial is 1.37 times more volatile than Jacquet Metal Service. It trades about 0.11 of its potential returns per unit of risk. Jacquet Metal Service is currently generating about -0.07 per unit of risk. If you would invest 1,040 in CNH Industrial NV on October 25, 2024 and sell it today you would earn a total of 170.00 from holding CNH Industrial NV or generate 16.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.33% |
| Values | Daily Returns |
CNH Industrial NV vs. Jacquet Metal Service
Performance |
| Timeline |
| CNH Industrial NV |
| Jacquet Metal Service |
CNH Industrial and Jacquet Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNH Industrial and Jacquet Metal
The main advantage of trading using opposite CNH Industrial and Jacquet Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNH Industrial position performs unexpectedly, Jacquet Metal 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 Jacquet Metal will offset losses from the drop in Jacquet Metal's long position.| CNH Industrial vs. Jacquet Metal Service | CNH Industrial vs. FIREWEED METALS P | CNH Industrial vs. PLAYMATES TOYS | CNH Industrial vs. DAIDO METAL TD |
| Jacquet Metal vs. CHEMICAL INDUSTRIES | Jacquet Metal vs. AIR PRODCHEMICALS | Jacquet Metal vs. Sekisui Chemical Co | Jacquet Metal vs. SEKISUI CHEMICAL |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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