Correlation Between CNH Industrial and Mill City
Can any of the company-specific risk be diversified away by investing in both CNH Industrial and Mill City 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 Mill City 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 Mill City Ventures, you can compare the effects of market volatilities on CNH Industrial and Mill City 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 Mill City. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNH Industrial and Mill City.
Diversification Opportunities for CNH Industrial and Mill City
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CNH and Mill is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding CNH Industrial NV and Mill City Ventures in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mill City Ventures 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 Mill City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mill City Ventures has no effect on the direction of CNH Industrial i.e., CNH Industrial and Mill City go up and down completely randomly.
Pair Corralation between CNH Industrial and Mill City
Considering the 90-day investment horizon CNH Industrial NV is expected to generate 0.61 times more return on investment than Mill City. However, CNH Industrial NV is 1.64 times less risky than Mill City. It trades about 0.14 of its potential returns per unit of risk. Mill City Ventures is currently generating about 0.05 per unit of risk. If you would invest 1,099 in CNH Industrial NV on September 19, 2024 and sell it today you would earn a total of 60.00 from holding CNH Industrial NV or generate 5.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNH Industrial NV vs. Mill City Ventures
Performance |
| Timeline |
| CNH Industrial NV |
| Mill City Ventures |
CNH Industrial and Mill City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNH Industrial and Mill City
The main advantage of trading using opposite CNH Industrial and Mill City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNH Industrial position performs unexpectedly, Mill City 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 Mill City will offset losses from the drop in Mill City's long position.| CNH Industrial vs. Columbus McKinnon | CNH Industrial vs. Astec Industries | CNH Industrial vs. Shyft Group | CNH Industrial vs. Rev Group |
| Mill City vs. Consumer Portfolio Services | Mill City vs. Atlanticus Holdings Corp | Mill City vs. Nelnet Inc | Mill City vs. Senmiao Technology |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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