Correlation Between CNH Industrial and Oshkosh
Can any of the company-specific risk be diversified away by investing in both CNH Industrial and Oshkosh 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 Oshkosh 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 Oshkosh, you can compare the effects of market volatilities on CNH Industrial and Oshkosh 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 Oshkosh. Check out your portfolio center. Please also check ongoing floating volatility patterns of CNH Industrial and Oshkosh.
Diversification Opportunities for CNH Industrial and Oshkosh
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between CNH and Oshkosh is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding CNH Industrial NV and Oshkosh in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oshkosh 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 Oshkosh. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oshkosh has no effect on the direction of CNH Industrial i.e., CNH Industrial and Oshkosh go up and down completely randomly.
Pair Corralation between CNH Industrial and Oshkosh
Considering the 90-day investment horizon CNH Industrial NV is expected to generate 1.08 times more return on investment than Oshkosh. However, CNH Industrial is 1.08 times more volatile than Oshkosh. It trades about 0.43 of its potential returns per unit of risk. Oshkosh is currently generating about 0.08 per unit of risk. If you would invest 1,100 in CNH Industrial NV on October 20, 2024 and sell it today you would earn a total of 127.00 from holding CNH Industrial NV or generate 11.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CNH Industrial NV vs. Oshkosh
Performance |
| Timeline |
| CNH Industrial NV |
| Oshkosh |
CNH Industrial and Oshkosh Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CNH Industrial and Oshkosh
The main advantage of trading using opposite CNH Industrial and Oshkosh positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CNH Industrial position performs unexpectedly, Oshkosh 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 Oshkosh will offset losses from the drop in Oshkosh's long position.| CNH Industrial vs. Cresud SACIF y | CNH Industrial vs. BBB Foods | CNH Industrial vs. The Andersons | CNH Industrial vs. AMCON Distributing |
| Oshkosh vs. Terex | Oshkosh vs. Astec Industries | Oshkosh vs. Hyster Yale Materials Handling | Oshkosh vs. Manitowoc |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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