Correlation Between CNH Industrial and Boiron SA
Can any of the company-specific risk be diversified away by investing in both CNH Industrial and Boiron SA 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 Boiron SA 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 Boiron SA, you can compare the effects of market volatilities on CNH Industrial and Boiron SA 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 Boiron SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNH Industrial and Boiron SA.
Diversification Opportunities for CNH Industrial and Boiron SA
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CNH and Boiron is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding CNH Industrial NV and Boiron SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boiron SA 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 Boiron SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boiron SA has no effect on the direction of CNH Industrial i.e., CNH Industrial and Boiron SA go up and down completely randomly.
Pair Corralation between CNH Industrial and Boiron SA
Assuming the 90 days trading horizon CNH Industrial NV is expected to generate 1.08 times more return on investment than Boiron SA. However, CNH Industrial is 1.08 times more volatile than Boiron SA. It trades about 0.27 of its potential returns per unit of risk. Boiron SA is currently generating about -0.28 per unit of risk. If you would invest 1,040 in CNH Industrial NV on September 3, 2024 and sell it today you would earn a total of 152.00 from holding CNH Industrial NV or generate 14.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNH Industrial NV vs. Boiron SA
Performance |
| Timeline |
| CNH Industrial NV |
| Boiron SA |
CNH Industrial and Boiron SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNH Industrial and Boiron SA
The main advantage of trading using opposite CNH Industrial and Boiron SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNH Industrial position performs unexpectedly, Boiron SA 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 Boiron SA will offset losses from the drop in Boiron SA's long position.| CNH Industrial vs. Zijin Mining Group | CNH Industrial vs. MCEWEN MINING INC | CNH Industrial vs. GUARDANT HEALTH CL | CNH Industrial vs. Jacquet Metal Service |
| Boiron SA vs. OFFICE DEPOT | Boiron SA vs. KENEDIX OFFICE INV | Boiron SA vs. CARSALESCOM | Boiron SA vs. FUYO GENERAL LEASE |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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