Correlation Between Bankers Investment and CNH Industrial
Can any of the company-specific risk be diversified away by investing in both Bankers Investment 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 Bankers Investment and CNH Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bankers Investment Trust and CNH Industrial NV, you can compare the effects of market volatilities on Bankers Investment 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 Bankers Investment with a short position of CNH Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bankers Investment and CNH Industrial.
Diversification Opportunities for Bankers Investment and CNH Industrial
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Bankers and CNH is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Bankers Investment Trust 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 Bankers Investment 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 Bankers Investment Trust 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 Bankers Investment i.e., Bankers Investment and CNH Industrial go up and down completely randomly.
Pair Corralation between Bankers Investment and CNH Industrial
Assuming the 90 days trading horizon Bankers Investment is expected to generate 8.89 times less return on investment than CNH Industrial. But when comparing it to its historical volatility, Bankers Investment Trust is 6.46 times less risky than CNH Industrial. It trades about 0.02 of its potential returns per unit of risk. CNH Industrial NV is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,055 in CNH Industrial NV on October 15, 2024 and sell it today you would earn a total of 0.00 from holding CNH Industrial NV or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bankers Investment Trust vs. CNH Industrial NV
Performance |
| Timeline |
| Bankers Investment Trust |
| CNH Industrial NV |
Bankers Investment and CNH Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bankers Investment and CNH Industrial
The main advantage of trading using opposite Bankers Investment and CNH Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bankers Investment 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.| Bankers Investment vs. Compagnie Plastic Omnium | Bankers Investment vs. Abingdon Health Plc | Bankers Investment vs. Universal Health Services | Bankers Investment vs. Worldwide Healthcare Trust |
| CNH Industrial vs. Bankers Investment Trust | CNH Industrial vs. Tetragon Financial Group | CNH Industrial vs. Ameriprise Financial | CNH Industrial vs. Cembra Money Bank |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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