Correlation Between EMBARK EDUCATION and CNH Industrial
Can any of the company-specific risk be diversified away by investing in both EMBARK EDUCATION and CNH Industrial 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 EMBARK EDUCATION and CNH Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EMBARK EDUCATION LTD and CNH Industrial NV, you can compare the effects of market volatilities on EMBARK EDUCATION and CNH Industrial 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 EMBARK EDUCATION with a short position of CNH Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of EMBARK EDUCATION and CNH Industrial.
Diversification Opportunities for EMBARK EDUCATION and CNH Industrial
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EMBARK and CNH is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding EMBARK EDUCATION LTD and CNH Industrial NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNH Industrial NV and EMBARK EDUCATION 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 EMBARK EDUCATION LTD are associated (or correlated) with CNH Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNH Industrial NV has no effect on the direction of EMBARK EDUCATION i.e., EMBARK EDUCATION and CNH Industrial go up and down completely randomly.
Pair Corralation between EMBARK EDUCATION and CNH Industrial
Assuming the 90 days horizon EMBARK EDUCATION LTD is expected to generate 0.73 times more return on investment than CNH Industrial. However, EMBARK EDUCATION LTD is 1.37 times less risky than CNH Industrial. It trades about 0.04 of its potential returns per unit of risk. CNH Industrial NV is currently generating about -0.01 per unit of risk. If you would invest 25.00 in EMBARK EDUCATION LTD on September 1, 2024 and sell it today you would earn a total of 6.00 from holding EMBARK EDUCATION LTD or generate 24.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
EMBARK EDUCATION LTD vs. CNH Industrial NV
Performance |
| Timeline |
| EMBARK EDUCATION LTD |
| CNH Industrial NV |
EMBARK EDUCATION and CNH Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EMBARK EDUCATION and CNH Industrial
The main advantage of trading using opposite EMBARK EDUCATION and CNH Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EMBARK EDUCATION position performs unexpectedly, CNH Industrial 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 CNH Industrial will offset losses from the drop in CNH Industrial's long position.| EMBARK EDUCATION vs. Universal Entertainment | EMBARK EDUCATION vs. Marie Brizard Wine | EMBARK EDUCATION vs. PLAYTIKA HOLDING DL 01 | EMBARK EDUCATION vs. GigaMedia |
| CNH Industrial vs. JJ SNACK FOODS | CNH Industrial vs. EMBARK EDUCATION LTD | CNH Industrial vs. United Natural Foods | CNH Industrial vs. CN MODERN DAIRY |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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