Correlation Between Chrysalis Investments and CNH Industrial
Can any of the company-specific risk be diversified away by investing in both Chrysalis Investments 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 Chrysalis Investments and CNH Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chrysalis Investments and CNH Industrial NV, you can compare the effects of market volatilities on Chrysalis Investments 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 Chrysalis Investments with a short position of CNH Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chrysalis Investments and CNH Industrial.
Diversification Opportunities for Chrysalis Investments and CNH Industrial
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Chrysalis and CNH is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Chrysalis Investments 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 Chrysalis Investments 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 Chrysalis Investments 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 Chrysalis Investments i.e., Chrysalis Investments and CNH Industrial go up and down completely randomly.
Pair Corralation between Chrysalis Investments and CNH Industrial
Assuming the 90 days trading horizon Chrysalis Investments is expected to under-perform the CNH Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Chrysalis Investments is 2.12 times less risky than CNH Industrial. The stock trades about -0.07 of its potential returns per unit of risk. The CNH Industrial NV is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 1,055 in CNH Industrial NV on November 7, 2024 and sell it today you would earn a total of 168.00 from holding CNH Industrial NV or generate 15.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chrysalis Investments vs. CNH Industrial NV
Performance |
| Timeline |
| Chrysalis Investments |
| CNH Industrial NV |
Chrysalis Investments and CNH Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chrysalis Investments and CNH Industrial
The main advantage of trading using opposite Chrysalis Investments and CNH Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chrysalis Investments 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.| Chrysalis Investments vs. BlackRock Frontiers Investment | Chrysalis Investments vs. Software Circle plc | Chrysalis Investments vs. EJF Investments | Chrysalis Investments vs. Spotify Technology SA |
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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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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