Correlation Between GLG LIFE and CNH Industrial
Can any of the company-specific risk be diversified away by investing in both GLG LIFE 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 GLG LIFE and CNH Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GLG LIFE TECH and CNH Industrial NV, you can compare the effects of market volatilities on GLG LIFE 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 GLG LIFE with a short position of CNH Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLG LIFE and CNH Industrial.
Diversification Opportunities for GLG LIFE and CNH Industrial
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between GLG and CNH is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GLG LIFE TECH 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 GLG LIFE 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 GLG LIFE TECH 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 GLG LIFE i.e., GLG LIFE and CNH Industrial go up and down completely randomly.
Pair Corralation between GLG LIFE and CNH Industrial
If you would invest 1,080 in CNH Industrial NV on November 4, 2024 and sell it today you would earn a total of 173.00 from holding CNH Industrial NV or generate 16.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
GLG LIFE TECH vs. CNH Industrial NV
Performance |
| Timeline |
| GLG LIFE TECH |
| CNH Industrial NV |
GLG LIFE and CNH Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GLG LIFE and CNH Industrial
The main advantage of trading using opposite GLG LIFE and CNH Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLG LIFE 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.The idea behind GLG LIFE TECH and CNH Industrial NV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| CNH Industrial vs. Federal Agricultural Mortgage | CNH Industrial vs. Penta Ocean Construction Co | CNH Industrial vs. International Consolidated Airlines | CNH Industrial vs. Titan Machinery |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |